Special offer

How to Settle a Tax Debt, Part 1: Offers-in-Compromise

Education & Training with Tax Rep LLC

I am a tax attorney in New Haven, Connecticut that helps taxpayers struggling with tax debt all over the country.  If you are feeling overwhelmed by mounting tax obligations, you're not alone. Luckily there's a solution that could ease your burden; the IRS Offer in Compromise (OIC) program. This program offers hope to those facing hardship by providing a way to settle tax liabilities for less than the amount owed. In this article we'll take a look at the IRS OIC program discussing its eligibility requirements, application process and important factors to consider.

The IRS OIC program is designed for taxpayers who may not have the ability to repay their tax debts in full. It allows qualifying individuals to negotiate a reduced settlement amount with the IRS under conditions. A key aspect of the OIC process is ensuring tax compliance, which means individuals must have filed all tax returns for at the past six years and be up to date on their current tax payments.

In Doubt as to Collectability Offers taxpayers can choose between lump sum or deferred arrangements. With lump sum Offers you make a payment of 20% of the amount you are Offering, with the balance due within 5 months after the Offer is accepted.  Deferred, or Periodic, Offers allow the Offer to be paid in monthly installments beginning when the Offer is filed and for a period not to exceed 24 months. 

The calculation of Reasonable Collection Potential (RCP) is crucial in evaluating OIC applications. RCP considers the taxpayer’s equity in assets and future income. The IRS evaluates all assets, including vehicles, investments and real estate to determine the equity it would be able to recover if foreclosure and sale occur. Future income projections are also assessed based on different time frames depending on the OIC type.

Navigating the OIC application process can be intricate requiring attention to detail and thorough documentation.

Although the IRS OIC program offers hope, for tax relief it's crucial to approach the process with expectations and a good grasp of the requirements. Seeking advice from a tax professional or lawyer who specializes in IRS Tax Resolution can offer support and guidance throughout the OIC process enhancing the chances of a positive outcome.

In summary the IRS Offer in Compromise program offers a solution for individuals struggling with tax debts. By understanding the eligibility criteria, application procedures and important factors involved people can proactively work towards relief and a brighter future free, from the burden of tax obligations.

If you or someone you know needs help resolving an IRS tax debt, please contact me at (203) 285-8545 or by email at egreen@gs-lawfirm.com.

Eric L. Green, Esq.

Green & Sklarz LLC

1 Audubon Street, 3rd Floor

New Haven, CT 06511

Ph. (203) 285-8545




Eric Green is one of the managing partners of Green & Sklarz LLC where he focuses his practice on civil and criminal taxpayer representation.  Eric is a nationally renowned tax expert and author/commentator of IRS civil and criminal tax matters.  Having lectured to more than 70,000 practitioners on civil and criminal tax topics, he is one of the nation’s best known lecturers in continuing professional tax education.  Eric is the author of the Insider’s Guides to IRS Representation, including Offers-in-Compromise.

Posted by

Comments (0)