IRS Offers in Compromise Work Under the Right Circumstances, but ….
21 Nov IRS Offers in Compromise Work Under the Right Circumstances, but ….
The Offer In Compromise (OIC) is prepared on IRS Form 656 and must include a detailed statement of financial position with substantiating documentation (bank statements etc.) prepared on one of the many IRS Form 433’s. To know which 433 to fill out I suggest reading the OIC booklet produced on IRS Form 656-B.
Not every taxpayer is a candidate for the Offer in Compromise program. So do not get lured by those late night commercials on television or a call center phoning you at all hours promising settlement for “pennies on the dollar.” The key to any Offer in Compromise resolution is strategic planning which can only be accomplished with detailed interviews and careful analysis of facts. Someone soliciting you with a pitch to settle with the IRS for “pennies on the dollar” without first knowing the specifics of your particular situation are ‘hucksters selling snake oil’ as my English teacher used to say. Many taxpayers will never qualify based on doubt as to liability, doubt as to collect-ability or effective tax administration; the three main focuses of the OIC.
The Offer in Compromise program has become more challenging in recent years. Yet it is still a viable mechanism to seek relief particularly upon appeal. Meticulous planning combined with aggressive advocacy throughout the entire process will greatly increase the likelihood of a successful Offer in Compromise resolution.