An Offer in Compromise is an IRS tax relief program designed to settle your tax debt for less than the full amount you owe. This may be a legitimate option to explore if you’re experiencing significant financial hardship and cannot reasonably afford to pay your tax liability in full.

While an Offer in Compromise is the best option available through the IRS Fresh Start Program, the eligibility requirements are strict. The IRS only accepts taxpayers who do not have the financial resources to fully pay off their federal tax debt.

Achieving an Offer in Compromise requires presenting a strong case that proves a taxpayer’s financial hardship. This will include evaluating your:

• Current income
• Expenses
• Ability to pay
• Asset equity

Settling your tax debt through an Offer in Compromise can reduce your tax liability to a small fraction of the original amount. TaxRise clients who qualify for the Offer in Compromise program typically see significant tax debt reductions – with some saving as much as 99%. Discover if you may qualify in a quick consultation with a TaxRise representative today.

To qualify for an Offer in Compromise, you must first comply with the IRS by filing all applicable unfiled tax returns.

You may be eligible for an OIC settlement if you meet the following requirements:

• You filed all required tax returns for the past six years.
• You do not have an ongoing bankruptcy case.
• You must file the current year’s tax return or have a valid filing extension.
• Before applying as an employer, you must have made tax deposits for the current and past 2 quarters.

There is no minimum tax liability amount necessary to qualify for an Offer in Compromise. Instead, resolution eligibility depends on each taxpayer’s unique financial and liability situation. If your OIC is accepted, you must remain in compliance with all filing and payment requirements for five years, or the IRS can reverse its decision and hold you liable for the full amount of your previous debt.

To ensure you are compliant with IRS requirements, we recommend connecting with a trusted tax professional. At TaxRise, we routinely handle the most complicated tax situations and negotiate OIC settlements for qualifying clients. Contact us today at 833-419-RISE (7473) or schedule a free consultation to discover if you may qualify for an Offer In Compromise.

After ensuring your tax filings are up to date, you can officially request an Offer in Compromise with IRS Form 656. This form will provide the IRS with your settlement offer, including the tax years with liability you wish to settle, your offer amount, and when you want to pay the offer amount.

Next, you’ll need to complete Form 433-AOIC (for individuals) or Form 433-BOIC (for businesses), providing the IRS details about your financial situation including your income, expenses, assets. The IRS will then verify this information and evaluate if your offer is reasonable based on your ability to pay.

The IRS rejects more than half of the Offer in Compromise requests that it receives each year. However, working with a tax professional can maximize your chances of approval. A tax resolution specialist can build a robust application that proves your financial hardship and inability to pay your tax balance.

If your OIC is rejected by the IRS:

• Within 30 days of the rejection date, you have the right to file an appeal using Form 13711 –
• Request for Appeal of Offer in Compromise.
• You can submit a new offer with different terms.
• You can explore alternative payment plans.

The IRS routinely warns taxpayers about shady tax relief companies known as Offer in Compromise mills. These predatory companies often mislead taxpayers with the false expectation of a guaranteed Offer in Compromise.

Only the IRS can approve an OIC or any other application for tax resolution programs. However, OIC mills will promise their clients a specific resolution before analyzing their tax situation or preparing the necessary forms for the IRS.

In addition, keep in mind that the IRS primarily communicates with taxpayers through mailed notices. If you receive an unexpected email or call concerning your account, contact the IRS to confirm its validity. Typically, the IRS will only attempt to call you after it has contacted you by mail. 

You are not required to seek professional help to submit for an Offer in Compromise. However, we strongly advise that working with a tax relief professional may increase your likelihood of approval.

An Offer in Compromise is the most difficult resolution to achieve and often requires extensive tax knowledge. Representing yourself in this case is almost like facing a prosecutor without a lawyer present. We recommend consulting with a tax practitioner to avoid setbacks regarding strict IRS requirements and paperwork. Leveraging professional help may also reduce the chance of your application being rejected.

Our tax relief specialists can file any unfiled tax returns you may have and negotiate with the IRS on your behalf to help you get the best possible resolution. Let us simplify the process and fight for the tax relief you deserve!

Your chance of achieving an offer in compromise increases when you have a trusted tax relief company like TaxRise on your side. Our team of tax professionals work with the IRS to achieve the best resolution possible for your situation.

We have the proven experience to navigate the complexities of IRS requirements on behalf of everyday taxpayers and businesses facing significant tax debt. As rising industry leaders, our tax strategy expertise helps us achieve settlement approvals for many clients each year.