Offer In Compromise Process
An Offer in Compromise is a process whereby the taxpayer offers the government a reduced sum of money in order to settle a delinquent tax bill.
An offer in compromise is not an amnesty program, nor is it motivated by the governments’ desire to cut delinquent taxpayers a break. Rather, it is a calculated business decision by the taxing agencies to accept a smaller sum in lieu of spending the collection resources on chasing the taxpayer until the statute of limitation on collecting the tax runs out. The average Offer in Compromise process takes 4 to 24 months depending on the complexity. The IRS rules state that an Offer in Compromise that is not returned or rejected within 24 months is automatically deemed accepted.
Here is a typical process and timeline for an Offer in Compromise:
Step 1 – Planning, Preparation And Submission
We review your case to determine whether you qualify for an Offer in Compromise, and on what terms. Upon completing our Offer in Compromise analysis we prepare and submit the Offer in Compromise package to the IRS. Our tax attorneys will also advise you about all aspects of the Offer in Compromise process.
Step 2 – The IRS Receives the Offer And Asks For More Info
The IRS determines whether your Offer in Compromise meets all of the procedural requirements of the Offer in Compromises manual. The IRS requests proof of the taxpayer’s financial condition to determine the adequacy of the Offer in Compromise.
Step 3 – The IRS Reviews the Financial Information
The IRS reviews your Offer in Compromise and attached documents to determine whether to accept your Offer in Compromise and for how much.
Step 4 – We Aggressively Negotiate With the IRS
We aggressively present your Offer in Compromise case to the government in order facilitate most favorable acceptance of your Offer in Compromise The success of your Offer in Compromise greatly depends on the skill an experience of your tax representative. Our tax attorneys have extensive experience in all aspects of the Offer in Compromise process.
Step 5 – We Appeal Unreasonable Refusals To Settle
If your Offer in Compromise is unreasonably refused, we immediately appeal the case. Appeals of rejected Offers in Compromise are generally reviewed by an Offer in Compromise appeals officer in the taxpayer’s district.
Step 6 – You Pay-Off Your Reduced Tax Bill
If your Offer in Compromise is accepted, you start making the payments on your reduced tax bill based on the agreed terms. An accepted Offer in Compromise requires the taxpayer to remain compliant with all future tax laws for 5 years from acceptance of the Offer in Compromise.
Related Topic: How Much to Offer