Offer in Compromise Help – Understanding Taxes Video Vault

Offer in Compromise Help

If you have come looking for Offer in Compromise Help,  you have come to the right place. But first what is an Offer in Compromise?

The OIC is a program developed by Congress that allows taxpayers to settle for less than they owe the IRS. Sometimes for pennies on the dollar.

The OIC is a program developed by Congress that allows taxpayers to settle for less than they owe the IRS. Sometimes for pennies on the dollar.

There are three types of Offer in Compromise.

Offer in Compromise Based Upon Doubt on Collectibility

In this particular type of offer, you would be asserting that there is no way that you will be able to pay the liability.

The amount of the offer depends on a math equation that is:

((Monthly Disposable Income x 12) + Value of Your Assets)) = Amount of Your Offer.

An example would be if you had $300 dollars a month in disposable income x 12. That would be $3600, and assuming you had no equity in assets, your offer amount would be $3600.

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It doesn’t matter how much you owe, it only matters how much you can afford to pay. So your offer amount would be the same whether you owed $20,000 or $200,000 or $2,000,000.

Offer in Compromise is Doubt as to Liability

In this type of offer, you would be asserting that the liability of the tax is not actually yours. So you should be entitled to pay less.

A common scenario would be in the case of Juniors. Take John Smith Sr. and John Smith Jr. with similar social security numbers. If dad’s liability is being assigned to his son then his son might file an Offer in Compromise. Based on his Doubt as to Liability rather than his ability to pay that liability.

This type of offer is rare because there’s almost always a better way to resolve the issue.

Offer in Compromise is Effective Tax Administration

I don’t know why they call it this, it’s sort of a silly name if you ask me, but it stands for the following situation.

Let’s say you don’t have much of a monthly disposable income. But you do have equity in assets. For example, maybe you’re retired and living in a home you own the deed to.

If you sold your home, you would be able to pay in full your tax liability. But if sold it you would have to pay rent, which you couldn’t afford on a monthly basis because you were on a fixed income.

At this, the IRS makes up less than the full amount of the liability and forgets the balance.

You can't just call the IRS and offer them $5000 to settle a $10,000 liability. It just doesn't work that way.

You can’t just call the IRS and offer them $5000 to settle a $10,000 liability. It just doesn’t work that way.

Those are the three types of Offer in Compromise deals. The only way you can do it is in the context of what I just described.

If you have questions about an Offers in Compromise call me at (888)-438-6474.

Enjoy the videos!

I’ve heard the IRS sometimes make deals, is that true?

The Three Types of IRS Offer in Compromise

IRS Offer in Compromise – Doubt as to Liability

IRS Offer in Compromise – Effective Tax Administration

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