Offer-In-Compromise, One Size Does Not Fit All

        In our previous post, we discussed how the “Offer-In-Compromise” (OIC) program is available to help settle tax debt. However, companies often misrepresent how this program works, and what its requirements are. This is an area worth taking time to consider because there will probably be several Taxpayers with a greater than expected tax responsibility brought on by changes made by the Tax Cuts and Jobs Act. Now we will look at the actual details of this program.

          First, there are different kinds of OIC filings. One applies to those who don’t think they owe the tax, another says that they can pay, but it will cause an undue hardship. Very few people use these options. The most popular choice is called “Doubt as to Collectibility”. This acknowledges the debt, but attempts to settle for a lower amount.

          For this application to be successful, the Taxpayer must prove that they qualify for the OIC. They must prove the cost and value everything. This will be difficult, especially considering the viewpoint of the IRS that everyone should be able pay their tax debt. One step that goes toward meeting that requirement is to make sure that all tax returns are filed. In our next post, we will discuss why an OIC should never be your first choice.

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