Offer in Compromise
Offer in Compromise Representation
Murray Moyer, PLLC assists taxpayers with resolving tax debts through the offer in compromise program. An offer in compromise, or OIC, allows you to settle your federal tax debt with the Internal Revenue Service (“IRS”) for less than the full amount you owe.
If you cannot pay your tax liability in full, and the amount offered represents the most the IRS could expect to collect within a reasonable time, an offer in compromise may be a legitimate option.
Grounds to Compromise a Tax Liability
An offer in compromise is defined as an agreement between a taxpayer and the IRS that settles a tax liability in exchange for payment of less than the full amount owed. The IRS is authorized to compromise a tax liability on any one of three grounds: (i) doubt as to collectability; (ii) doubt as to liability; or (iii) to promote effective tax administration. You must also be current on all tax filing and payment requirements with the IRS and you cannot currently be in bankruptcy proceedings.
The IRS’s stated goal with the offer in compromise program is to achieve collection of what is potentially collectible at the earliest possible time and at the least cost to the government.
OIC Ability to Pay Analysis
In reviewing an offer in compromise, the IRS will examine your financial situation in detail including your ability to pay. This analysis includes a detailed review of your monthly income and expenses, and the equity in your assets. Prior to filing an offer in compromise application with the IRS, it is very important to review and understand how your current financial situation impacts your eligibility under the IRS’s offer in compromise program. In fact, the ability to pay analysis is the most important pre-filing process for determining your eligibility for an OIC.