Offer in Compromise

You may have heard how an offer in compromise can settle your tax problems for less than you actually owe. While it is true that the Internal Revenue Service and many State taxing authorities accept less than what is owed when they accept an offer in compromise, getting an offer in compromise accepted is not always easy.

An offer in compromise is an agreement to settle tax debt between the IRS and a taxpayer. An IRS Offer in Compromise (OIC) is a formal written proposal that an individual taxpayer files with the IRS to settle their tax liabilities for less than the amount the IRS claims is owed. Although Offers in Compromise are available to taxpayers, the discretion to allow or grant a reduction in a valid tax liability is entirely up to the IRS. More specifically, it’s up to the IRS whether or not they’ll agree to take less than the amount you owe.

Not everyone qualifies for an Offer in Compromise. Despite the television commercials that seem to guarantee your IRS taxes will be reduced and you’ll pay cents on the dollar to settle your IRS taxes, only about 25% of Offers in Compromise are accepted. Although the acceptance percentage may change a bit every year, many unsuspecting taxpayers file Offers in Compromise prepared by companies or professionals that are inexperienced or by “tax mills” only to find out that their Offer in Compromise wasn’t accepted because they never qualified in the first place.

If you’re looking to resolve your tax debt and are considering an Offer in Compromise, consider De Luna Law. Mr. De Luna is an experienced tax lawyer and a CPA who worked for the Internal Revenue Service as an IRS Agent for 13 years before entering private practice. We can provide you a free initial tax consultation to help you determine whether an Offer in Compromise is a viable option to resolve your IRS tax problems as well as guide you through the process if there is a likelihood of the IRS accepting the Offer in Compromise.