Offer in Compromise

An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer’s tax liabilities for less than the full amount owed. Absent special circumstances, an offer will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement. In most cases, the IRS will not accept an OIC unless the amount offered by the taxpayer is equal to or greater than the reasonable collection potential (RCP). The RCP is how the IRS measures the taxpayer’s ability to pay and includes the value that can be realized from the taxpayer’s assets, such as real property, automobiles, bank accounts, and other property. The RCP also includes anticipated future income, less certain amounts allowed for basic living expenses. We will prepare all documents necessary to negotiate for a settlement with the IRS that is less than the total amount you owe. We will ensure we file the proper way to reflect your financial situation. We can also prove effective tax administration by showing that if the IRS were to liquidate your finances, this would produce undue financial hardship on you. Your financial information determines the amount of the debt that you pay.


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