An Offer in Compromise (OIC) is a resolution program the IRS offers, allowing individual and business taxpayers to settle their tax liabilities for less than the amount owed. It is primarily based on a mathematical formula applied to a taxpayer’s financial condition.
Background
The client was an individual assessed with tax liabilities from 2011 through 2016, with an amount due of $229,366.01.
Challenge
The client owed taxes to multiple taxing authorities and was unable to fully pay the IRS liability.
Solution
We analyzed the client’s financial situation to determine whether the client was a good candidate for an OIC. After discussing our findings, all potential outcomes, and the risks of pursuing an OIC with the client, he decided he wanted to move forward with it.
We completed the OIC application and a financial statement showing the client’s inability to full pay, then submitted it to the IRS. The proposed offer amount was $500. Approximately nine months after the OIC submission, an IRS Offer Specialist was assigned to investigate the case. Additional supporting documents were requested and negotiations began.
Result
After reviewing the client’s application and the additional information provided, the IRS accepted the OIC for $500 and the IRS liability was resolved.
After thoroughly analyzing the client’s financial situation and proving the client’s inability to pay with the IRS, we obtained an Offer in Compromise of $500 to resolve the original tax amount of $229,366.01.
The results achieved are specific to this taxpayer and cannot be guaranteed for every situation.
