Offer in Compromise

What is an Offer in Compromise?

There are really two different types of tax settlements.  The first is called an Offer in Compromise (“OIC”).  An OIC is where we essentially put together a packet for the IRS and explain to them that we want to settle your tax debt for pennies on the dollars.  There are many financial worksheets that are involved that our tax professionals will take the time to sit with you and help you fill these documents out correctly.  An OIC is also another great way to stop a tax garnishment, because under law when an OIC is submitted, all collection procedures must stop.

There are two types of OIC, the first is a Doubt as to Collectability.  This is the most common OIC as essentially we tell the IRS that over the taxpayer’s life, the amount they owe can never be paid.  Our tax experts will work to formulate a number based upon financial worksheets and submit this to the IRS.  If accepted, the IRS will “write off” the remainder of your tax debt and you get the fresh start you need.

The second type of OIC is Doubt as to Liability.  This form of OIC can be submitted when there is a genuine dispute as to the existence or amount of a taxpayer’s correct liability. A Doubt as to Liability OIC has many striking qualities, but it also has exceptional criteria and limitations that Tax practitioners should investigate with their clients.

Not all people qualify for an OIC.  That is why it is crucial to meet with one of our tax professionals so we can see if you qualify for an OIC.  If you do not qualify our tax experts will look at alternative settlement options for you.   Call us today at 702-358-FLAT for a free consultation.

Payment Plan with the IRS

The second type of tax settlement is an Installment Agreement or a payment plan with the IRS.  What we do in this situation is negotiate the lowest amount we can that the taxpayer can pay each month until their tax debt is paid in full.  This is the most common type of tax settlement.   Again, Installment Agreements require that you fill out financial paperwork for the IRS.  Once retained, our staff at Flat Fee Attorneys will help correctly fill these forms out so that your installment agreement is not delayed or denied.

The IRS is required to agree to an installment plan if your balance due is $10,000 or less and you meet all of the following criteria:

  • For the previous five years you haven't filed late or paid late.
  • All your tax returns are filed.
  • Your monthly installment payments will pay off your balance in 36 months or less.
  • You've had no installment agreement in the previous five years.
  • You agree to file on time and pay on time for future tax years.

If your tax liability exceeds $10,000, then the experts at Flat Fee Attorneys can step and help you make the monthly payments back to the IRS the most manageable for the taxpayer and give them the peace of mind knowing they are tax complaint and that they will not wake up one morning to a zero balance in their bank account due to a levy.

Many times taxpayers will call themselves and try to settle the debt.  This is not recommend as the IRS usually will make the taxpayer pay more per month than they should be.  Also, at Flat Fee Attorneys we can look to see if tax debt is old enough to “fall off” because of the Statue of Limitations.

Can’t pay the IRS?

Outside the two settlement options of Offer in Compromise or Installment Agreements, many people qualify for what we call CNC or currently non collectable status.  This is where we explain to the IRS that the taxpayer just simple cannot pay anything at this time, so we ask them to put the taxpayer on CNC status.

This is a great move for someone who is elderly or just lost their job.  Many times the IRS will also close the case if they determine they will never be able to collect on the taxpayer.

CNC status can be tricky to accomplish as the IRS always wants you to pay something.  That is where the tax experts at Flat Fee Attorneys can help you by communicating with the IRS agent and explaining the financial hardship it is causing.  After convincing the IRS that any payments would cause a severe financial hardship, our tax experts ask that the taxpayer be put on the CNC status.  This confirmed by a letter from the IRS telling the taxpayer that they have been accepted into currently non collectable status.

What are the Fees for this service?

We have one fee at Flat Fee attorneys, which means when you sit down with one of our tax professionals we will examine the severity and work needed on your case and quote you a fee at that time.  There are no hidden costs, just one fee to do all the work.  The consult is free!