We have flexible hours, locations, and filing options that cater to every hardworking tax filer. We won't stop until you get every dollar you deserve, guaranteed. It's what we've been doing for over 35 years. Find my nearest or Zipcode or city. View offices on map. We can help resolve your tax issues. Call today. Why do so few get an OIC? The real cost: the offer amount Most people believe that the IRS haggles with the taxpayer about how much it will take to settle the tax bill. Other viable alternatives Low-income taxpayers do not have an OIC user fee or down payment and generally do not have a significant financial outlay when submitting an OIC.
A last tip Taxpayers should not just look to the OIC as their only collection solution. Learn More. The IRS may reject the offer if it doesn't meet their approval threshold, leaving taxpayers no option but to file an appeal or look to another IRS collection alternative payment plan, currently not collectible status, extension to pay. To ensure that the first application is well-drafted, contact a Tax Debt Associate for your free consultation.
We have answers! Read on to learn more about your options and where you can turn for help when paying your back taxes. What do you need tax help with? Select your situation Assets seized Bank account levy Can't pay unpaid taxes Lien filed Received audit notice Unfiled tax returns Unpaid penalties and interest Wage garnishment Other.
However, there is nothing to prevent you from resubmitting the offer once the deficiency has been corrected. Returned Offer in Compromises are also an expensive, but valuable lesson on the importance of filing good paperwork with the IRS. If everything was submitted properly and your offer truly is being rejected, it is time to take stock of the situation.
First, check to see if the offer specialist concluded that your reasonable collection potential based on the IRS financial formulas exceeded your stated minimum offer amount? If so, double check your initial offer submission please tell me that you kept a copy to verify that your financial statement was filled out to your maximum benefit?
Did you get the most benefit out of your allowable expense categories? Did you overstate your income? Are your asset valuations accurate? If not, it may be better to withdraw your offer in compromise and resubmit it. The IRS will not keep record of a withdrawn offer in compromise, but a rejected one will count as a strike against your record — especially if the reason it was rejected was not corrected. There are two possibilities here.
First, compare the calculations of the offer specialist to your calculations and see where they differ. Do you have a fight? If the revised offer amount that the specialist is proposing is reasonable, perhaps you are better off taking it and running. Think about it: there are still tax savings to be had with any accepted offer in compromise, even if it is not for the amount that you hoped for. Think you are going to have trouble paying the revised offer amount?
Maybe the specialist will consider switching you over to more manageable payment terms. After all, the IRS does have an incentive to accept your offer as some money to the government is better than none. What if the offer specialist did change something in their calculation that caused the offer to be rejected and you disagree with them?
First, try talking to the specialist directly and try to persuade them to reverse course. Ideally, this should have been done before the rejection letter went out, but sometimes you can save an offer from the ashes with a little finesse and a good argument.
Offer specialist still not budging? Note: This includes divorced, separated, or married couples living apart if all liabilities are joint and they choose to file a joint offer together. One Form with one application fee and offer payment if you are compromising either a partnership or corporate liability.
Two separate Forms , one for the business or corporation liabilities and one for the individual liabilities, when the intent is to compromise both if:. Both sections should not be combined on one Form One form may be used if your business is a sole proprietorship linked to your SSN. A separate offer, with application fee and offer payment, is needed if your business is not a sole proprietorship linked to your SSN.
You will need to gather information about your household's average gross monthly income and actual expenses. The entire household includes all those in addition to yourself who contribute money to pay expenses relating to the household, such as rent, utilities, insurance, groceries, etc. This is necessary for the IRS to accurately evaluate your offer. It may also be used to determine your share of the total household income and expenses.
You may designate which tax debt you would like to apply your offer payment s to in writing when the offer is submitted or when the payment is made.
You may not designate the application fee, or any payment after the IRS accepts the offer. In the absence of any written designation request, the IRS will apply the offer payment s in the best interest of the government. You should send two checks, one for the application fee and one for the required offer payment.
If only one check is received, the IRS will apply the application fee first and then the remainder toward the required payment amount. If you do not qualify for the low income certification, or have not checked the low income certification box, the offer will be returned. If you qualify for the low income certification, and have checked the box, the money will be held as a deposit until a decision has been made on your offer.
Checks that combine application fees for several offers will not be accepted and the offers will be returned. Each Form must have separate checks attached. For offers originally sent to Holtsville, NY, send the payment to: P.
Box , Holtsville, NY Box , Memphis, TN Offer payments that must be sent with the offer are not refundable. The IRS will try to contact you to provide you with one opportunity to pay the missing amount.
If you do not make the payment, the offer will be withdrawn and returned to you without appeal rights. All payment s already received will be applied to your tax liabilities.
The IRS will also keep the application fee. If a triggering event occurs and you properly enter into a transfer agreement under section i 2 , your section i net tax liability associated with the transfer agreement will not be assessed. If you do not enter into a transfer agreement under section i 2 , you will be required to timely pay the triggered section i net tax liability either in its entirety or according to the installment schedule if you properly make a section h election with respect to the triggered section i net tax liability or the offer will default.
Review the letter for the reason s we returned your Offer in Compromise. If you believe we returned the offer in error, you can request a reconsideration by calling the number on your return letter and providing your objections within 30 days from the date of the return letter.
If you no longer have the original Form , you can provide a new Form with the same offer amount and terms as the original. If you paid an application fee that was returned to you, then you must send the application fee back to us; any offer payments you paid with the original offer will be applied to your new offer. If you need new forms, you can download a copy on irs.
If you disagree with the rejection, you have 30 days from the date on the rejection letter to appeal by following the instructions in the letter. If you agree with the rejection, you can send full payment of your tax debt to avoid additional interest and penalty, or request an installment agreement to pay your tax debt. You must remain in compliance with filing and payment of all tax returns for a period of five years from the date the offer in compromise is accepted, including any extensions.
If you do not pay the offer in compromise on time and remain in compliance during the five-year period after the offer in compromise is accepted, including any extensions, your offer will default. A copy of the acceptance letter is in the offer case file, which has been forwarded to the Federal Records Center.
Effective June 25, , once your offer is accepted, all offer payments should be mailed to:. A one-time extension may be granted on an offer payment within a month period. All subsequent payments must be made timely. Contact the monitoring examiner to request the extension. The amount offered by the taxpayer to settle the debt must be equal to or greater than the Reasonable Collection Potential.
Accurate documentation is always required when dealing with the IRS. Be transparent and always double or even triple check the accuracy of any information you share with the IRS. Patience is vital when applying for an OIC. We exist in a society driven by instant gratification, but the IRS does not share in that lifestyle.
Learning to be patient when the IRS is involved can be essential to helping you achieve the desired results. No set timelines exist for how long completing an OIC will take. The OIC process can take longer than a year, but the average is roughly six months. Factors that could potentially speed up the OIC process include the following: Your only income is from Social Security or disability.
You are over the age of 55, fully retired, and live on a fixed income. Questionable circumstances are involved, such as the following: Multiple loans.
Multiple vehicles. Random unexplained deposits. To increase your chances of having the process be as efficient as possible, you need to ensure that you provide information that is complete, up-to-date, and relevant. Send all documentation that is requested and leave nothing out, even if it seems insignificant. If the IRS sends a request for more information, as it usually does, be sure to provide accurate information and do so promptly.
Either way, you will only be adding to the time that it will take to bring the process to a conclusion. Though it is difficult to get an OIC approved, it can be done. If your OIC is accepted, you have to hold up your end of the agreement by remaining in compliance with all of the requirements outlined in the OIC.
Are You in Too Deep? Dealing with IRS issues can be a bit intimidating. Here at Solvable , we strive to provide you with the knowledge and the resources to help you in your back tax assistance efforts.
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