A Tax Consultant for All Seasons

Now that you know what an Offer In Compromise can do for you, let’s look at some of the reasons you might decide this option is not for you. Note that all prior year returns must be filed before you can submit an Offer.

• The fact that you have applied for an OIC is a matter of public record for one year.
• The IRS is likely to audit your recent tax returns during the process
• The process can take up to 2 years.
• The IRS will take any tax refunds you might have in the year the OIC is accepted.
• This process requires Full Financial Disclosure.
• If you default on this agreement, the IRS reinstates all penalties and interest.
• A down payment of 20% of the amount of the Offer is required with the application and is retained even if not approved.(This amount is then applied to your tax liability)
• The process extends the statute on your liability during the review plus 30 days.
• You MUST file and pay all your taxes for 5 years.

Keep in mind, if the IRS determines that with your assets and future earnings potential, you will be able to pay off the liability before the statute expires, if will reject the OIC. If you do decide this process is the best option for you, a tax consultant can help you through the process.

This blog is about the advantages of an Offer in Compromise. The Offer in Compromise is a procedure the IRS has in place when there is either a doubt as to the liability, collectability or to promote Effective Tax Administration. The main advantages of an OIC are: a fresh start and it removes any levies or liens that are in place. This is a complicated process and usually requires the assistance of a tax consultant

Many tax payers try to handle this on there own. Companies like Effectur can provide assistance in wading through the rules and regulations and complex process that is the Offer in Compromise. The process usually takes months to complete. Having a team of experts in your corner will make the process less of a mystery. The next part of this series goes into details as to the many disadvantages of an OIC.

We often hear this question from clients. Many companies have advertisements that say they can get you a settlement for pennies on the dollar. Unfortunately, as the saying goes, if it sounds to good to be true, it probably is. Not that this never happens, but it is extremely rare. What they are really asking about is what the IRS terms an Offer in Compromise. Before you try to go this route there are few things you need to know.

The Offer in Compromise is a complex process that actually has a relatively small chance of being approved. Plus, there are many reasons you may not qualify. The next few blogs will discuss what you need to know to file an Offer in Compromise. While they are most often done for individuals, they can also be done on a Sole Proprietorship or on a Small Business.

A new feature I am adding is Tax Term of the day. Today’s term is Offer in Compromise follow this link to get a defintion of this and many other tax terms. If you need IRS help with an Offer or other Tax Issues, follow this link to the fastest tax resolution company in the business.