Offer In Compromise (OIC) Agreement

Filed under: Offer in Compromise

Offer In Compromise (OIC) is an agreement between the taxpayer and the Internal Revenue Service to pay a tax amount which is lesser than the original debt. But applying for an OIC is often a complicated and cumbersome process. It is reported that the IRS accepts only about 16% of the total OIC applications received. But you need not worry. Nowadays, Offer In Compromise help is available from various sources. The best choice would be to approach a qualified tax professional for OIC help.
But you should be very careful while selecting your tax professional, as a number of people are actually deceivers under the cover of tax help. In fact, cheating cases have increased so much to the extent that the IRS itself is forced to warn taxpayers not to hire unqualified tax professionals. It is in your best interest to approach a Tax Attorney, Certified Public Accountant (CPA), or Enrolled Agent (EA) for getting your Offer In Compromise help. They may charge fees ranging from $1,500 to $3,000, which may increase with detailed OIC representations. But beware – there are some people who charge much lower fees. They will just stop with preparing the OIC forms. They will not help with documentation, nor will negotiate with the IRS on your behalf.
Hence, it is essential that you be choosy in selecting your tax professional who is going to help you with your OIC. The professional should be experienced in the area of IRS collection and must have updated knowledge of IRS tax debt collection laws and evaluation procedures. He/she should have adequate experience in dealing with Revenue Officers, Automated Collection systems division, and appeals. It is also necessary to check his/her clientele to determine the success rate.
These facts are to be kept in mind while approaching a tax expert for Offer In Compromise help.

Posted on January 24th, 2010 by admin

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Tips for Filling in the Offer in Compromise Form

Filed under: Offer in Compromise

The IRS provides a readymade package which makes it easy to file an Offer In Compromise. Current Form 656, Forms 433-A and 433-B are included in the package. This has eliminated a lot of hassles over filing an OIC.
There is also a worksheet included in the package with the relevant details and instructions, for calculating the OIC amount. If you are an individual or self-employed, you have to furnish a Collection Information Statement along with Form 433-A.
In order for your OIC to be considered, you should explain in detail about your current financial situation and your inability to make full payment of the tax amount. The relevant public policy or equity consideration should also be quoted in support of your OIC. You should verify whether columns such as date and signature are accurately filled. Do not fail to check whether you have attached all the relevant financial documents with your OIC, including an Income Certification in Form 656. You have to pay an application fee of $150 either by check or by money order. Be informed that there are certain exemptions from paying this application fee.
Thus, your application has to be carefully submitted, as any error would lead to delay, or worse, the rejection of your OIC application. You can take the advice of a tax expert for it. Nowadays, there is also tax software available online, which has made the process of applying for OIC quite easy. If you are approaching a tax expert for negotiation with the IRS on your behalf, you have to fill and sign Form 2848 and give it to the tax expert.
OIC forms can be taken from the internet, from a local IRS office, or requested through the telephone. You have to mail the completed application to the concerned office. Taxpayers residing in Western states should mail their OIC application to Memphis, and those in Eastern states should mail it to Holtsville, NY.

Posted on January 23rd, 2010 by admin

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