IRS: Offer in Compromise - Types of OICs

The Internal revenue service will accept an offer in compromise (OIC) if the amount of repayment that is offered is equal to or exceeds the reasonable collection potential (RCP).

The RCP is determined by the value of a taxpayer’s assets. Property, vehicles, bank accounts and even expected future income constitute potential assets which the IRS evaluates to determine whether or not to accept the offer in compromise.

Our tax attorneys and consultants are very familiar with the IRS guidelines that dictate whether or not the offer in compromise will be accepted by the government.

There are various types of OICs. The IRS may accept an offer in compromise if the following conditions are met:

1. Doubt as to Collectability – If doubt exists over the fact that the taxpayer could, at any point within the remainder of the statute of limitations (the legal timeframe for collection of the debt) pay the entire amount that is owed.

2. Doubt as to Liability - A genuine uncertainty or disagreement in regards to the amount of tax debt that is owed as claimed by the IRS. For example, when IRS makes a claim, they do not consider possible deductions or exemptions.

3. Effective Tax Administration – Even if there is no doubt in regards to the amount that is owed and all parties acknowledge it to be accurate, as well as the potential to collect being high, exceptional circumstances such as hardships or public policy factors may contribute to the IRS’ willingness to negotiate a tax settlement.

4. Identity Theft – Taxpayers are not liable for amount of taxes due in the event that they were the victim of identity theft and the reported income was never in fact earned.

For more information on IRS Offer in Compromise, please visit our Frequently Asked Questions and IRS Guidelines.

If you are interested in tax relief and would like to find out more about qualifying for the Offer in Compromise program, contact us today for a FREE consultation. Our tax consultants are standing by to take your call, walk you through the process and thoroughy evaluate your situation. We are dedicated to helping taxpayers in their time of crisis and we are prepared to help you through this difficult time. Call us today and recover your financial future!