What's An IRS OIC?
A process that allows you to pay only a potion of your tax debt (as little as 1% of the tax due) to the IRS is known as an Offer in Compromise (OIC). In order to qualify for this, rigid requirements should be satisfied.
You should clearly understand that in America, taxpayers basically have no legal rights to ask or have a valid tax debt reduced by any amount, other than by paying it. The government is completely at its discretion regarding the reduction of anybody's tax bill. Fortunately, the IRS is obliged to give a just amount of consideration to OICs that are correctly submitted in most cases. The odds of success are rather slim. Accepted OICs are less than half of what's submitted, but fortunately, your options do not stop there. You can take your rejected OIC to the IRS Appeals Office for further review.
The submission of an OIC entails a rigid process. You have to accomplish the Offer in Compromise Form 656 with an application fee of $150. If you can prove that you qualify under the guidelines of poverty by submitting the Application Fee Worksheet attached to the Form 656 booklet, you can be exempt from this fee.
The OIC process isn't fast and simple. When you complete the appropriate forms, there will be several other steps to take. Once you've submitted the forms, you will be asked to provide financial documents proving your case. These may include vehicle registrations, bank records, pay slips, and a host of other documents that you may or may not have readily on hand. You must assess the benefits and the costs of utilizing this method to fix your IRS issue because it's very time-consuming to file an Offer in Compromise. Also, if your OIC is rejected, the IRS can use the information you submitted to aggressively collect the debt you owe them. It's an excellent idea to make sure your case is substantially compelling before you actually file an OIC.
You should satisfy any of three conditions to be considered for an OIC. One condition states that there must be doubt as to collectability, meaning there is substantial doubt that the IRS can collect the tax debt from you now or in the future. Doubt as to liability is another concept. This would involve providing enough proof to question if you're indeed responsible for the tax debt. The last concept states that paying your tax debt fully is unfair as it will place you at an extreme economic hardship.
About the Author
Darrin T. Mish (http://www.getirshelp.com) is a Nationally recognized Attorney whose practice focuses on representing clients across the United States with IRS Problems. He is AV rated by Martindale-Hubbel and is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. He has been honored by a listing in Martindale-Hubbel's Bar Register of Preeminent Lawyers. He can be reached at his website at http://www.getIRShelp.com
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