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Offers In Compromise

 

Contrary to popular belief, the IRS does not have an "amnesty" program for those who owe a lot of back taxes they cannot pay. However, if you are current on filing your returns, they sometimes may be willing to settle for less than what you owe, if you meet the criteria for the Offer In Compromise program.

An OIC is only feasible if you have access to funds that the IRS cannot otherwise touch, AND you would be unlikely to pay the taxes you owe within five years. In general, the sum of the resale value of any assets they can seize from you, plus the present value of the payments they could expect to receive from you for the next 5 years, would be the MINIMUM offer amount that they would likely consider. If you have an offer approved, you are also making a contract with the IRS that you will not be delinquent in taxes for any reason for the next five years; if you are, the offer is rescinded.

If you feel that you may qualify for an Offer In Compromise, your best alternative is to seek out a tax professional who deals with a lot of OICs, and let him or her advise you. If you cannot afford to use a tax professional for guidance, call your local IRS office and ask to meet with someone to discuss the possibility of an Offer In Compromise. You will need to provide the person helping you with copies of your most recent tax bills, plus complete financial information about your assets, liabilities and current income/expenses.

 

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Disclaimer
We do not offer legal advice. All information provided on this website is for informational purposes only and is not a substitute for proper legal advice. If you have legal questions, we recommend that you seek the advice of legal professionals.

Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.

Copyright 2017 Wink Tax Services / Wink Inc.
Last modified: January 30, 2017