What is an Internal Revenue Service Offer in Compromise (OIC) and how does it work?
UPDATE: The IRS has recently reduced dramatically the amount required to settle and Offer in Compromise. The amount that a taxpayer must pay to settle an OIC has been reduced by 75%!!!
There are many new changes to the program. These changes make it possible for many taxpayers who did not qualify for an OIC in the past to now settle their IRS tax liability!
An OIC is a tax settlement between the Internal Revenue Service and a person or business to settle their liability for a certain amount. If accepted, it is the ultimate tax relief. If accepted, you pay the IRS what you can afford to pay, not what you owe, unlike an Installment Agreement. We pride ourselves in arranging many such tax settlements.
There are two major grounds for an OIC Tax Settlement:
- The first is Doubt as to Collectability. This means that there is doubt that the IRS will be able to collect the full amount that you owe.
- The second is Doubt as to Liability. This means that there is a legitimate dispute as to whether the liability is owed.
Most IRS Settlements are based on Doubt as to Collectability.
Doubt as to Collectibility
The IRS settlement that you pay to the IRS is based on two things:
(1) How much your assets are worth, after deducting the loans against them; and
(2) How much your earnings are compared to your expenses.
In determining how much you can afford to pay, the IRS will want as much as they believe they can get from your earnings over a ONE year period, unlike the 4-5 years before the new changes.
There are two ways to fund a settlement. The first is Cash which is due within 90 days of the IRS accepting the offer. The second is a Short Term Deferred payment plan. This type of settlement is paid with installment payments over a two year period.
These are complicated complex matters. For the Government go give up its rights to collect money owed them, they must be convinced that you can’t afford to pay the liability.
It is our job to work with you in a partnership to insure that we convince the IRS to accept your OIC. We do this by vigorously representing you before the IRS:
- Gathering together the Information necessary to submit your package
- Preparing the necessary documentation to submit your package
- Properly submitting the package at the best time, in the best location possible
- Complying with all of the requests for additional information
- Negotiating with the IRS to settle your matter for as little as possible
- Appealing your case if it is rejected
Filing an action in Court in some circumstances to get the OIC accepted
This can be a long drawn out process. It often takes up to a full year for one to be processed. The IRS will look very carefully at the information provided that supports settlement. They will request additional updated information, perhaps several times.
If you file an OIC, the IRS will not take steps to collect while it is pending. You may obtain a levy release once it is filed. You may be able to stop making payments on an installment agreement.
When we file your matter, we are in the process for the long haul. It will likely take a long time. But, we will vigorously fight for your rights and to get it accepted.
Settle your Debt for Pennies on the Dollar……Fact or Fiction?
Some no baloney facts about the claims made by some National Organizations
If you have a Lien filed against you, you will get advertisements from all over the country claiming they can settle your taxes for “pennies on the dollar.” You also see advertisements on television and in other places which claim to be able to settle your liability for a small portion of what you owe.
Then, when you respond, they will charge you $3,500 to $10,000 to represent you. The sad part is that you might or might not qualify for an OIC. We have heard stories about how these organizations just rip off people, then after they have gone through the process are told, “sorry, but the IRS just won’t accept your proposal.” And this is after going through thousands of dollars and a year of time. Often these people are left in much worse shape than when they started.
The truth of the matter is that the IRS doesn’t just settle with taxpayers for minimal amounts without good reason. There are specific criteria that the IRS is required to follow before accepting settlements.
FACT: There were approximately 122,000 Offers in Compromise filed in a recent year.
FACT: There were only about 12,000 accepted. That is less than 1 in 10 Offers accepted!
FACT: Many of these companies have had MANY complaints against them with the Better Business Bureau. Many of them have had lawsuits filed against them which they had to pay huge damages to settle. Others have filed Bankruptcy.
Do you need an Attorney to help with your Offer?
The simple fact is that having a competent and honest Attorney handle your OIC will dramatically increase the chances of it being accepted! The problem is finding the right professional.
How do you know what to do? How do you know who to trust?
At Martelle, Bratton & Associates, P.A we will provide a no obligation, NO BULL evaluation of your circumstances. We will tell you whether or not you qualify for an OIC or some other form of relief.
- We will tell you honestly whether or not we can help.
- We will tell you what we can and can’t do for you
- We will give you a written fee quote if we can help
- We will vigorously represent you if you retain us
- We will keep in contact with you
- We will be completely honest with you
We have settled many cases for very modest amounts of money. We have also advised people that they will not qualify for an OIC. We tell people the truth!
Proud member of the Better Business Bureau
We are an A+ Rated Law Firm
At Martelle, Bratton & Associates, P.A., we specialize in helping individuals and businesses overcome IRS difficulties. We have 35 years’ experience assisting clients. We provide the highest quality legal services to clients with IRS problems, throughout the United States. We are a tough, aggressive and highly skilled law firm. Our practice is focused on matters related to solving Internal Revenue Service Problems.
Attorney Martin (“Marty”) Martelle and his staff have extensive experience providing assistance with various kinds of IRS related issues, particularly Offers in Compromise and Unfiled Tax Returns.
For a No Obligation consultation to have your IRS problems analyzed by a competent and experienced Tax Lawyer, contact us at:
1 877 TAX CREW (877 829-2739) or 208 938-8500
Or, fill out our online form and find out what we can do to assist you. We offer a No Obligation consultation to all clients, and special payment plans to those who need them.
Representing clients with tax problems throughout the United States.
Martelle, Bratton & Associates, P.A.
873 E. State Street
Eagle, Idaho 83616
Tel: 208 938 8500
Toll Free: 1 877 TAX CREW (877 829 2739)
Fax: (208) 938-8503
The information you obtain at this site is not legal advice. You should consult an attorney for individual advice.
copyright © 2012 by Martelle, Bratton & Associates, P.A.