An IRS Offer In Compromise (OIC) has become an increasingly popular way to guide your client’s settle their tax debt. Especially when you are confronted with clients who may not be able to pay their entire tax burden, you may be able to work on your client’s behalf with the IRS to review the financial situation your client is facing and assess whether an offer in compromise (OIC) might be an option. It’s important to understand the ins and outs so that you know whether the IRS would be willing to accept a lesser amount of money as payment in full. Our course will help you understand the basics of what an OIC entails and whether it’s right for your client before you begin the process.
What Is An Offer In Compromise (OIC)?
An offer in compromise (OIC) is an agreement between a taxpayer and IRS that allows a person to settle his or her tax debt for less than they owe. To qualify for an OIC, a person must prove he or she can’t pay what he or she owes based on income, expenses, assets and earning capacity. The IRS will consider all reasonable alternatives to collect unpaid taxes, which includes an OIC. Our course will help you determine whether or not your client may qualify for an OIC, and understand the various factors that can affect their eligibility.
How Do I Know If an OIC is Right For My Client?
When you submit an OIC to resolve your outstanding tax debt on behalf of a client, there are two main factors that will determine whether your offer may be accepted:
1) The IRS’ ability to collect and
2) Your client’s commitment to future compliance.
If your clients are unable to pay taxes owed due to financial hardship, an offer in compromise may be a good option for getting back on track financially. In our course, we will explore how an OIC works and when to choose it as an option for the right client.
Factors That Affect An IRS Offer In Compromise
The first step in determining if your clients may be eligible for an IRS offer in compromise is to determine what factors may be affecting their taxes. Knowing these factors will help you decide whether an OIC is even a possibility for your client. Some of these factors that we will study include:
- Legal issues that may exist in addition to tax debt
- Not being able to pay current monthly bills
- Absence of any assets with which to pay tax debts, etc.
- Health issues currently and going forward.