Significant tax debt can be overwhelming, and many taxpayers are unsure where to turn. One of the most powerful tools for resolving tax debt is the IRS’s Offer in Compromise (OIC) program, which allows qualifying taxpayers to settle their tax liabilities for less than the total amount owed. However, applying for an OIC is far from simple, and attempting to go it alone can lead to costly mistakes and delays. In this post, we’ll explain why seeking professional help is crucial if you’re considering an Offer in Compromise.
What Is an Offer in Compromise?
An Offer in Compromise is an agreement with the IRS that allows you to settle your tax debt for less than the full amount owed. The IRS accepts these offers only when they believe the taxpayer cannot pay their full liability within a reasonable period or through other payment options, like installment agreements.
According to the IRS Data Book, over 30,000 OIC applications were submitted in 2023, but only 12,711 were accepted. That’s a success rate of around 42%. The reality is, getting an OIC approved is challenging, and without professional guidance, your chances of success significantly decrease.
Why Going It Alone Is Risky
The Offer in Compromise program is highly technical and filled with potential pitfalls that can trip up even the most well-intentioned taxpayers. Here’s why going it alone is risky:
- Complex Forms and Documentation: The IRS requires a mountain of detailed financial documentation. Even minor mistakes or omissions can result in delays or outright rejection of your offer. A tax professional knows exactly what the IRS is looking for and can ensure your paperwork is flawless.
- Proper Calculation of Your Offer: The IRS has a strict formula to determine what they will accept. Many taxpayers under- or overestimate the amount they should offer, leading to quick rejections or unnecessarily high payments. A tax professional can calculate the right offer based on your financial situation and maximize your chances of acceptance.
- Navigating IRS Negotiations: It’s not just a waiting game once you submit your offer. The IRS may request additional documentation or clarification, and knowing how to respond is crucial. Professionals are experienced in negotiating with the IRS and can advocate for you, ensuring your case gets the attention it deserves.
- Avoiding Common Mistakes: Many taxpayers make preventable errors like submitting incomplete information, not staying current on their taxes, or proposing unrealistic offers. These mistakes can result in a lengthy rejection process, wasting valuable time and possibly worsening your financial situation. A tax professional will steer you clear of these pitfalls.
How We Can Help You
Submitting an Offer in Compromise is a highly detailed and technical process. The IRS scrutinizes every aspect of your financial situation, and even a small error could derail your chances of success. Here’s how working with our team can make a significant difference:
- Expert Evaluation: Not everyone qualifies for an OIC, and we’ll assess your financial situation upfront to determine if this option is even viable for you. If it’s not, we’ll explore other tax resolution strategies.
- Accurate Documentation: We’ll handle all the paperwork, making sure it’s complete and error-free. From filling out IRS Form 656 to compiling your financial statements, we ensure that everything is submitted correctly the first time.
- Skilled Negotiation: The IRS may challenge your offer or request additional information. With our experience, we’ll manage all communications with the IRS, negotiating on your behalf to secure the best possible outcome.
- Increased Chances of Success: Remember that less than half of OIC applications are accepted by the IRS. By partnering with a tax resolution professional, you drastically increase your chances of having your offer approved, saving you both money and stress in the long run.
Avoid Costly Delays and Rejections
Many taxpayers believe they can manage the Offer in Compromise process themselves, but statistics show that a significant portion of offers are either rejected or delayed due to errors or incomplete documentation. Filing an OIC without expert help often leads to long processing times, additional IRS scrutiny, and a higher likelihood of rejection.
Don’t risk making mistakes that could cost you time and money. Professional guidance is essential to ensure your offer is presented in the best possible light and that the IRS has no reason to reject it.
Conclusion: Get the Help You Need Today
An Offer in Compromise can be a lifeline for those struggling with overwhelming tax debt, but the process is complex, and mistakes can be costly. Trying to navigate the IRS’s requirements on your own increases the chances of rejection. Our team specializes in tax resolution and has the expertise needed to handle the entire OIC process, from preparing your offer to negotiating with the IRS.
Don’t leave your financial future to chance. Contact us today to schedule a consultation and get the professional help you need to successfully settle your tax debt. Let us put our experience to work for you.
Schedule an Appointment Below!
M.A. Rubin CPA, PLLC
Tel: 833-MA-Rubin (627-8246)
Email: Blog@RubinTaxRelief.com
Disclaimer: This blog post is for informational purposes only and does not constitute legal or tax advice. Consult with a qualified professional for specific advice regarding your business.
