OIC 101: First Things First

Often, as a senior tax consultant, I'll get phone calls from clients who want to bypass everything and get into a conversation about settling their tax debt. Clients do not understand taxpayers requesting an OIC must have filed all required federal tax returns. If in business, they must also have filed and paid any required employment tax returns on time for the two quarters prior to filing the OIC, and to get themselves current with deposits for the quarter in which the offer in compromise was submitted.

Recently, actor Westley Snipes discovered that it is a federal offense to refuse or to neglect to file your taxes. In such a case, there are two aspects to be considered:
1) Criminal Aspect, non filing and
2) the Civil or Monetary Aspect

One cannot come before the other. The IRS will not even allow a tax resolution firm to file an OIC on behalf of a client who has any unfiled years of taxes. The IRS considers them criminals.