The primary focus of my firm is tax representation in Parkchester, NY. Many taxpayers may believe that an Offer-In-Compromise (OIC) is needed in order to resolve their back-tax debts. There are plenty of commercials that would make one believe that their back-tax debt could be reduced to pennies on the dollar. However, not everyone will need or even qualify for an OIC. The ability to obtain an OIC is really based on how much back-tax debt the taxpayer has as well as the ability to repay the debt. If the IRS determines that the taxpayer can pay all of the back-tax debt, then there would be no compromise and the taxpayer would be expected to make some other repayment arrangements on the full amount owed.
The OIC could be the right solution for a taxpayer, but the Reasonable Collection Potential (RCP) will ultimately determine whether the taxpayer would qualify for an OIC. The RCP would take into account the taxpayers net equity in personal assets and their future income potential. The IRS would look at the taxpayer’s net equity in assets and total gross income less qualified household expenses in determining overall future income potential used to pay the debt. The IRS provide guidelines on local, state and national levels on what expense limits can be considered in reducing the taxpayer’s gross income. The RCP is only part of the package submitted to the IRS in determining whether OIC will actually be accepted.
If you or anyone you know owes back taxes and think you may qualify for an OIC, feel free to contact me at (917) 708-1097 or via email at millertax.ea@gmail.com.
Miller Tax & Advisory Services
P.O. Box 967
Parkchester, NY 10462
Ph. (917) 708-1097
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