Offer in Compromise is an opportunity offered by the IRS to help anyone who is behind on taxes — individuals or businesses —to get caught up. While it may sound like an ideal way to handle back taxes, penalties, and interest while also getting square with the IRS, it is not as straightforward as that. Ideally, Offer in Compromise is a way to help individuals and businesses reach solvency without going out of business or declaring bankruptcy. However, this is the IRS, so it is not quite as simple as that. If you are considering submitting an Offer in Compromise, here’s what you need to know:
Do Not DIY
Given the number of resources available through the IRS website, it can be tempting to apply for an Offer in Compromise without the guidance of a professional. If you want to improve the likelihood your offer will be submitted, it is absolutely worthwhile to have professional help you seek tax resolution. When it comes to businesses in particular, it is notoriously difficult to get your Offer in Compromise accepted because the IRS sees it as giving some businesses an unfair advantage over others. Working with an experienced tax consultant will give you a better chance of your offer being accepted, but we can also help you find alternatives for becoming solvent with the IRS.
Do Not Ignore the Power of the Appeal
When an Offer in Compromise is rejected, that is not the end of the line. Rejections can be appealed. Working with a tax consultant can help you present a stronger offer, but even good offers can be rejected. The appeal process gets a fresh set of eyes on your situation and your offer, which may be all it needs to get your offer accepted. Granted, this primarily works for offers that were put together well and have plenty of supporting documentation. Connect with a tax consultant to learn more about what that looks like and what sort of documentation will help you present a solid offer.
Do Not Take the IRS’ First Offer
When an Offer in Compromise is rejected, the IRS examiner is required to look into other collection alternatives for your business. The good news is that you should get at least one other option for tax relief. However, they may encourage you to withdraw your Offer in Compromise in order to explore other options. If you have a good offer, do not let yourself get pressured into taking a one-size-fits-all payment plan. An offered alternative plan may be the best option for the IRS, but is not necessarily the best option for you. On the flip side, if it appears that your offer will be rejected, a payment plan may be a decent alternative.
Professional Help Makes All the Difference
No matter what your hopes are for tax resolution, the best thing you can do is start by talking to an experienced tax consultant. We know the ins and outs of IRS collection alternatives and can help you find the right tax alternative option for your specific situation. Start by connecting with our team to schedule a consultation!