Venar Ayar

Failure to get your offer in compromise (OIC) accepted is always devastating both financially and even emotionally because you are left with a tax burden that might be worse than before. A lot of these offers are rejected because incompetent tax resolution firms make one of six common mistakes. So, what are these mistakes, and how can you avoid them? We have looked at the 6 common offers in compromise mistakes that you should avoid.

What Is An Offer In Compromise?

You cannot make an OIC if you don’t know what it entails. This is an option provided by the IRS that permits taxpayers to settle part of their debts. It is a great option since it gives taxpayers a new beginning with the IRS, but the primary aim of the offer is to come to an agreement for payment that is friendly to both the IRS and the taxpayers.

You can submit an offer in compromise on the following grounds:

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I. Concept and Goals

a. Taxpayers who have few assets and little prospect of generating sufficient income to pay a tax liability in full may be allowed to strike a settlement for less than the full amount due to settle their case.

b. The IRS’s acceptance of an offer in compromise conclusively settles the liability, absent fraud or mistake.

c. What is the policy goal? To achieve collection of what is potentially collectible at the earliest possible time and at the least cost to the government while providing taxpayers with a fresh start toward future voluntary compliance. Read More

Effective January 1, 2014, processing fees for standard installment agreements and doubt as to collectability offers will increase. Fees for direct debit installment agreements are unchanged. Low income fees and fee waivers are also unchanged.

The notice of proposed rule making proposed to increase the fee under § 300.1 for entering into an installment agreement from $105 to $120 and to increase the fee under § 300.2 for restructuring or reinstating an installment agreement from $45 to $50.

Under the notice of proposed rule making, the fee for a direct debit installment agreement remained $52, and low-income taxpayers, as defined in § 300.1(b)(2), would continue to pay $43 for any new installment agreement, including a direct debit installment agreement. The Read More