Offer-In-Compromise: Higher than Most Would Expect


         In our earlier posts on this subject, we discussed how much work it takes to even begin to qualify for an Offer-In-Compromise (OIC). After proving that you are not in a short-term economic hardship or dealing with a surprise due to the Tax Cuts and Jobs Act (TCJA) acceptance may be granted. That is when the really difficult work begins.

          The Internal Revenue Service (IRS) will conduct a special OIC review, which could last up to 2 years. This in-depth investigation will search the history of the Taxpayer in attempt to see if they truly qualify at the offer amount. Are they hiding assets? What does their credit report show? These are some of the questions that the examiner will seek to answer. As a result, its not unusual for an OIC to be appealed to a higher level after the review. This could be due to a dispute regarding asset levels, non-payment while the review is taking place, or not paying the 20% down payment.

          Taxpayers need to understand the realities of the risk they take when going down this path to enter an OIC. Less than 50% of those who apply will be approved. Any fee paid will not be returned. It’s always best to examine all your options and find out what is best for your situation.

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