OIC 101:Which One Fits ?

There are several different types of OICs.
A professional tax resolution firm needs to assess your individual situation to submit the proper OIC or you can waste a lot of time and money. One of the keys to getting a OIC accepted is ensuring it is processable. This is only possible when you have submitted a offer consistent with the qualifications necessary to qualify for the type of OIC you are trying to get.

There are actually 4 completely different types to look at:
○ OIC doubt as to liability, OIC doubt as to collectibity
○ OIC effective tax administration
○ OIC partial pay installment agreement.

A reputable tax resolution firm will verify your qualification for each of these.

OIC 101: In The Governments Best Interest

Have you ever tried to get ahead of your car payments or mortgage? You thought I've got to get this balance down. Maybe if I take and make some double payments on some of my bills I can get them knocked out. SURPRISE! The IRS is just like the mortgage companies and car loan places in as much as they like interest and penalties.

In 2006 the new TIPRA law was introduced . This is basically the introduction (as you know from prior blog posts) of the 20% plus $150 filing requirements. Taxpayers are not required to but may designate the application of the TIPRA payments. The designation must be made in writing when the offer is submitted or when they make their first payment on the offer. If not submitted in writing the IRS will apply the 20% "In The Governments Best Interest" A professional tax resolution firm can, and should be used to set this up. This will insure your best interest is protected instead of you just paying more interest.

OIC 101:How Do You Eat An Elephant?

There are many misconceptions concerning OICs. I would have to say one of the biggest is how you take care of such a large debt, or elephant. There is an old saying or question: "how do you eat an elephant?"

Answer... one bite at a time! Most people who qualify for an OIC are dealing with large liabilities which seem overwhelming.

"Taxpayers may choose to pay the offer amount in a lump sum, in monthly payments over the remainder of the statutory time allowed for collection, or a combination of a lump sum and monthly payments. Generally, it is to the taxpayer’s advantage to pay the amount in the shortest time possible because longer payment terms will require a larger offer amount."

A professional tax resolution firm can look at your finances and advise you on the pros and cons of any option you are considering. Many taxpayers who don't consult a tax resolution firm run the risk of accepting terms dictated by either the Treasury who only have their own interests at heart or a third party with little or no knowledge of the potential long-term effects of the different options available.

OICs 101 : Do You Feel Lucky, Punk?

Have you ever known that guy or girl who always wins raffles or contests, or they win stuff from radio stations by being the 8th caller? Do you personally know anyone who has won a jack pot in Vegas? I wish there was at least someone in my family who won the lottery. That would be close enough to lucky for me.

For the rest of us, here are the odds we have to beat to be one of the lucky ones with the IRS. As of last count, there are 8.2 MILLION delinquent tax payer accounts actively in the IRS's system for the year of 2007. Out of those delinquent accounts there were 12 thousand OICs accepted. I hate math but this math I really didn't enjoy. You have less than ONE % chance with those numbers to come out with an OIC accepted.

I mentioned luck in my title. There really isn't any room at all to rely on luck. Self representation (doing it yourself) or calling a firm that promises everyone an OIC is definitely a good way to be another statistic. Tax offers or OICs need to be done the first time by a reputable tax resolution firm.

OICs 101: SHOW ME THE MONEY

Yes, it will cost you money right up front to even submit an OIC. Starting in 2001 the IRS started off setting costs of frivolous OICs being submitted. This due to alot of "do it yourself", "self representation" being attempted by the public. There were also many inappropriate offers submitted by less-than-scrupulous tax firms, CPAs and/or tax lawyers to delay enforced collections. This $150.00 filing fee, according to the Commissioner of Small Business/Self-Employed Division, will help redirect resources to the processing of acceptable offers.

"Taxpayers who file an OIC will have to pay the application fee with their submission unless the offer is based solely on doubt as to liability, or the taxpayer’s total monthly income falls at or below income levels based on the Department of Health and Human Services poverty guidelines. Taxpayers who claim the poverty guideline exception must certify their eligibility."

OICs 101

Today's post begins a series of blogs where I will shed some light on OICs (Offers In Compromise), the most advertised and sought after option for handling IRS debt. I will give you the "inside scoop" from enrolled agents, who have the daunting task of negotiating correctly this calculated, complicated resolution that seems to be a cure-all for IRS debt. I will cover and uncover numerous myths about OICs during this series of blogs. So hang on and see where it takes you !