When people first hear about the IRS Offer in Compromise (OIC) Program, (depending on where they hear about it from), many common misconceptions may come with it. So, I am here to clear up some of the most common myths about the OIC Program
Myth #1 – The OIC Program is a scam or “too good to be true”
There are usually two extremes that people go to when you ask them what they think or know about the OIC program. This myth is on one end of the scale. (We will cover the other extreme in the next section). People often immediately (and falsely) assume that the OIC Program is a scam. I will admit…there are several “tax resolution” companies out there who do use the program to scam innocent people by promising potential clients that they will get them an Offer in Compromise (and settle for pennies on the dollar) before even looking at their financials. While that is all codswallop, the program itself is NOT a scam. The IRS has 10 years to collect a tax debt from a taxpayer. And they certainly do not want to spend that time trying to collect a tax debt that the taxpayer simply cannot pay. They also do not want to cause undue hardship by demanding someone pay their full liability if they cannot afford to do so and still meet their basic living necessities. So, they are willing to work with taxpayers to get at least some of what is owed to them. It makes the most economical sense to the IRS if they ever want to see any of that money.