It's a reasonable question. There are several reasons that someone might be wondering what the Offer in Compromise Acceptance Rate is. Maybe you submitted an OIC, it's been a while since you've heard anything about it, and you're wondering if you actually have a real shot at getting your offer accepted at the IRS. Or maybe you're weighing your options. You don't know if you should go for it, cross your fingers, and wait? If you were going to go strictly by the numbers, I'd say this isn't a good bet.
According to the 2011 IRS Databook about 57,000 OIC submissions were received in 2010, but only around 14,000 were accepted – or just under 25%. In 2011, the numbers got a little bit better. The percentage of OICs accepted in 2011 rose to just above 33%. So you can submit an offer, wait for what seems like forever, hoping that it gets accepted, and 66% of the time you'll be disappointed. Well, not exactly; read on to understand why these numbers shouldn't discourage you from seeking a path to freedom from IRS Debt.
Can we ring our own bell for a moment?
Our Offer in Compromise Acceptance Rate here at IRSMedic is close to 3 times the IRS's overall acceptance rate of offers in compromise in 2011. Yes, you read that right. Why is it so high? Because we only submit OICs that we believe in. We only submit offers when we know the IRS has to say yes. Sometimes the IRS will say no at first, but we make sure that we hold them accountable. We appeal unreasonable rejections of Offers in Compromise that should be accepted.
So why is the Offer in Compromise Acceptance Rate by the IRS so low? Because the IRS isn't CapitalOne. You can't just offer them a 40% lump sum payment and expect them to take it on the grounds that you are currently unemployed. An Offer in Compromise isn't your standard Debt Settlement. To understand why, we need to consider the purpose of the program. The purpose is to give taxpayers a fresh start, but only after they come into compliance.
I've seen so many cases where IRS personnel will send out the paperwork for an OIC (called a Form 656 and 433-A(OIC)) to a taxpayer simply because the person tells the IRS representative that he wants to "settle my tax debt." They don't even bother to mention that he better have filed every single tax return over the past ten years before they'll take a serious look.
A kinder, gentler, IRS? Nah…not really
Why does the IRS let taxpayers apply for OICs when they should be telling them it won't work out? Because the IRS has nothing to lose. See, while the offer is being considered, the amount of time the IRS has to collect is suspended. For example, supposed the IRS had 3 years left to collect on a 7-year-old tax debt. Now, the taxpayer submits an Offer in Compromise for that year. The IRS "considers" the OIC for a year before rejecting it. The IRS still has 3 years left. If no Offer had been submitted, they would only have two years left to collect.
Don't believe anyone who tells you that you are guaranteed to qualify for an Offer in Compromise. There may be better programs out there; the Offer in Compromise isn't the only way to get the IRS out of your life forever. If you need assistance understanding which program would be best for you, contact us for a free consultation.
