Often there are circumstances that arise when a taxpayer has accumulated a substantial tax liability that clearly exceeds any ability to pay in a lump sum. In this situation, the taxpayer should consider hiring an Offer in Compromise attorney to handle the negotiations with the IRS.

The IRS has made great strides in improving the processing of OICs. These efficiencies are making it easier for taxpayers to navigate the OIC process and enable them to receive responses in a timely manner.

Most offers in compromise are denied as the IRS recently stated that over 83% of the offers are rejected. The two main reasons that rejection occurs is because the documentation is inaccurate or incomplete or the taxpayer earns in excess of the required allowance. Your offer in compromise attorney will make sure that your filing is accurate and complete.

If the IRS sends you a response, make sure that you respond promptly. You may only have a few weeks to get the final information prepared and submitted back to the IRS. Failing to timely respond is often a reason for rejection.

Upon final review, the IRS assesses the taxpayer’s collection potential. This is where many offers breakdown. The taxpayer may not have the funds currently, but they are generating income and have the ability to pay off the entire balance over time. Under these circumstances, the IRS would prefer an installment agreement rather than an offer in compromise.

Make sure that you cooperate fully with the IRS and provide any necessary documentation with a quick turnaround. In addition, make sure that you keep all of you tax filings current and pay any required estimated taxes by the due date.

Offer in compromise help can come from many tax professionals. Whoever you select to help you in the process, just make sure that you are able to communicate freely with them and they understand your situation. This will give you the best chance for success.

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