Is the IRS predisposed again Offers in Compromise?

It seems that they are- but why? Sometimes an Offer in Compromise is really the best choice for both the taxpayer and the IRS. If the taxpayer submits an OIC, he/she is more likely to remain compliant since future compliance is a prerequisite to getting an offer accepted.



What is future compliance? For a self-employed individual, he/she must be current with their estimated tax payments. For a wage-earner, they must be withholding the proper amount. Also, the taxpayer must remain compliant and must file all returns and if there is a balance it must be paid- FOR FIVE YEARS! If not, you will default the offer and the IRS will collect on the original amount owed, plus penalties and interest. (There are many other requirements as well).



Also, recent studies show that most of the Offers that were rejected by the IRS ended up becoming Currently Non-Collectible, which means that instead of collecting a lump sum payment or a monthly payment amount, the taxpayer does not pay any funds until his or her financial situation changes (if it ever does). SO- technically a good portion of OIC rejects end up never paying anything at all on there tax liability. Seems like something- even a settlement offer- would be better than nothing, doesn't it!?!

One thing is certain- Offers in Compromises are not easy solutions to tax liabilities but for some people is might be the BEST solution. The important thing is to just be sure that you trust whoever is advising you on how to handle your tax debt. Some firms offer pennies on the dollar solutions to draw people in. Then, they take their money, file frivolous offers and keep their money. The IRS is cracking down on so-called "offer mills" in order to protect the taxpayer. However, there are some reputable tax firms out their which promise to find the right fit for each individual. Just make sure you make the right choice.