Many people are surprised to find out that you can negotiate with the IRS and pay only a portion of your back tax debt. So how does an Offer in Compromise work?
The IRS will determine how much they think you can afford to pay back by looking at your income, assets, and expenses. This is known as your Realistic Collection Potential (RCP). There are 100% legitimate ways to whittle that RCP way down…way, way down…to a point where the Offer in Compromise amount is much lower and puts you in a much better position.
Also, the IRS has a limited time to collect a tax bill. The IRS is limited by law to only be able to collect tax bills that have been assessed for 10 years.
So how an IRS Offer in Compromise works –in simplest terms — is to look at how much you owe, what your RCP is, and the remaining years on collection. If you offer an amount that is at or above your RCP, then your Offer in Compromise has a good chance of getting accepted.
How does an IRS Offer in Compromise work when you are unemployed or hit a "rough patch"?
The IRS will likely not accept your current unemployment compensation (or no compensation) as proof of your RCP. Rather they will seek to use what you were making at your last job, or what you could be making.
What percentage of Offer in Compromises are accepted?
We have a 98% Offer in Compromise success rate over the last 3 years. And the ones we didn't win, we knew were "pushes." The overall nationwide success rate is around 40%.
How much should I Offer the IRS with an Offer in Compromise?
There is no easy answer to this question but we can tell you what the answer isn't. The IRS Offer in Compromise pre-qualifier tool is a joke. Do not put too much trust into it. We have submitted Offer in Compromises that were accepted even though the calculator and the pre-qualifier told us they didn't stand a chance!
Should you file an Offer in Compromise yourself or hire us?
I think we are the best in the business at negotiating difficult Offers in Compromise, but that's not really why I want people to hire us. While we love getting the lowest settlement for our clients with the IRS, that settlement amount is actual incidental to our larger goal — we are most passionate about getting an IRS problem completely gone for our clients. You don't "buy" an Offer in Compromise from us; you get, for a fixed fee, a dedicated tax team that guarantees and warranties IRSMedic will do it once and do it right. No matter what curve balls the IRS throws at us.
If you want to discuss the best options for your particular case, contact us. We can help. Call us at 888-727-8796 or email info@irsmedic.com.
