Beware of misleading claims, such as “We can settle your tax debt for pennies on the dollar with an offer in compromise.”
As the old saying goes: If it sounds too good to be true, it probably is.
Approximately 25 percent of all regular offers in compromise filed with the IRS will be accepted, and only after intense negotiations. Most, if not all, are initially rejected with a request for more information. We will only submit an offer in compromise for our clients after a thorough analysis of their situation and the opinion that they meet all the required IRS criteria for a successful OIC process — which can easily exceed one year, start to finish.
On the other hand, for some taxpayers that qualify for an offer in compromise, a different course of action may yield better results at a lower cost to the client. We will always present all alternative solutions, comprehensively explaining their benefits and downsides to our clients before filing an offer in compromise on our client’s behalf.
The amount of the offer in compromise is based on a complex formula consisting of many factors such as income, expenses, assets, liabilities and what the IRS calls disposable income.
Taxpayers also need to know that once an offer in compromise has been accepted by the IRS and the negotiated debt has been paid, the IRS expects the taxpayer to stay current on his or her taxes from that point forward. In fact if a taxpayer fails to remain in compliance for five years after the offer has been accepted, the IRS will reject the offer in compromise and reinstate the prior tax that was due.
If you are being audited by the Internal Revenue Service, Franchise Tax Board or any other state or local tax authority, contact the tax attorneys at David Lee Rice, A Professional Law Corporation, at 310-517-8600 immediately for a consultation.