{"id":825,"date":"2022-10-19T10:10:10","date_gmt":"2022-10-19T10:10:10","guid":{"rendered":"http:\/\/www.irstaxapp.com\/?p=825"},"modified":"2022-10-19T10:12:54","modified_gmt":"2022-10-19T10:12:54","slug":"offer-in-compromise-irs","status":"publish","type":"post","link":"https:\/\/www.irstaxapp.com\/offer-in-compromise-irs\/","title":{"rendered":"10 Decider Facts Offer in Compromise IRS May Accept or Reject"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><picture><source srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs-1024x576.webp 1024w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs-300x169.webp 300w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs-768x432.webp 768w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs-495x279.webp 495w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs-150x84.webp 150w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs.webp 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" type=\"image\/webp\"><img src=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs-1024x576.png\" height=\"576\" width=\"1024\" srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs-1024x576.png 1024w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs-300x169.png 300w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs-768x432.png 768w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs-495x279.png 495w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs-150x84.png 150w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/10\/offer-in-compromise-irs.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" class=\"wp-image-5585 sp-no-webp\" alt=\"offer in compromise irs\" decoding=\"async\" loading=\"lazy\"  > <\/picture><\/figure>\n\n\n\n<p>Whether the <em>Offer in Compromise IRS a<\/em>ccepts or rejects depends on your application&#8217;s unique facts and circumstances. Acceptance of your Offer in Compromise application by the IRS will depend on many factors, including your ability to pay debts, income, expenditure, assets etc. Remember, as a general rule, the IRS approves an Offer in Compromise when all facts presented before it indicates that the maximum collection possible as per the OIC is almost the same as IRS expected.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_62 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6629da9fa8336\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6629da9fa8336\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.irstaxapp.com\/offer-in-compromise-irs\/#1_What_is_Offer_in_compromise_IRS_programme\" title=\"1. What is Offer in compromise IRS programme?\">1. What is Offer in compromise IRS programme?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.irstaxapp.com\/offer-in-compromise-irs\/#Video_10_decider_facts_on_offer_in_compromise_IRS\" title=\"Video: 10 decider facts on offer in compromise IRS \">Video: 10 decider facts on offer in compromise IRS <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.irstaxapp.com\/offer-in-compromise-irs\/#2_IRS_does_not_accept_offers_in_compromise_automatically\" title=\"2. IRS does not accept offers. in compromise automatically\">2. IRS does not accept offers. in compromise automatically<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.irstaxapp.com\/offer-in-compromise-irs\/#3_Test_Your_Eligibility_for_Offer_in_Compromise\" title=\"3. Test Your Eligibility for Offer in Compromise\">3. Test Your Eligibility for Offer in Compromise<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.irstaxapp.com\/offer-in-compromise-irs\/#4_What_is_the_fee_for_an_offer_in_compromise_IRS_application\" title=\"4. What is the fee for an offer in compromise IRS application?\">4. What is the fee for an offer in compromise IRS application?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.irstaxapp.com\/offer-in-compromise-irs\/#5_For_which_years_can_IRS_consider_an_offer_in_a_compromise_application\" title=\"5. For which years can IRS consider an offer in a compromise application?\">5. For which years can IRS consider an offer in a compromise application?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.irstaxapp.com\/offer-in-compromise-irs\/#6_Are_you_current_with_tax_filing_estimated_tax\" title=\"6. Are you current with tax filing &amp; estimated tax?\">6. Are you current with tax filing &amp; estimated tax?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.irstaxapp.com\/offer-in-compromise-irs\/#7No_OIC_if_Filed_for_Bankruptcy_proceedings\" title=\"7.No OIC if Filed for Bankruptcy proceedings\">7.No OIC if Filed for Bankruptcy proceedings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.irstaxapp.com\/offer-in-compromise-irs\/#8_What_is_IRS_Collection_Information_Statement\" title=\"8. What is IRS Collection Information Statement?\">8. What is IRS Collection Information Statement?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.irstaxapp.com\/offer-in-compromise-irs\/#9_Where_to_Get_the_Offer_in_compromise_IRS_form\" title=\"9. Where to Get the Offer in compromise IRS form?\">9. Where to Get the Offer in compromise IRS form?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.irstaxapp.com\/offer-in-compromise-irs\/#10_Fourcommon_reasons_IRS_reject_your_offer_in_compromise\" title=\"10. Fourcommon reasons IRS reject your offer in compromise\">10. Fourcommon reasons IRS reject your offer in compromise<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_What_is_Offer_in_compromise_IRS_programme\"><\/span>1. What is Offer in compromise IRS programme?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There may be varied reasons that may have given rise to unpaid <a href=\"https:\/\/www.irstaxapp.com\/irs-tax-debt-what-irs-can-do-to-collect-it-what-you-should-do\/\">tax debt<\/a> in your name. You financial conditions may be such bad that paying a tax liability is a huge burden on you. In such a scenario, IRS has a programme under which they may agree with you for a lesser amount of payment of outstanding tax and settle the tax debt forever. Thus, IRC 7122 empowers IRS to compromise on the actual burden of tax debt and agree to a lower amount based on the facts and circumstances of the applicant under offer in compromise.<\/p>\n\n\n\n<p class=\"has-background\" style=\"background-color:#ffddc4\"><strong>An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that permanently settles tax liabilities for an agreed sum by both parties-taxpayer as well as IRS.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Video_10_decider_facts_on_offer_in_compromise_IRS\"><\/span>Video: 10 decider facts on offer in compromise IRS <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If you do not have time, watch this 2-minute video to get a summary of the offer in the compromise post. <\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"jeg_video_container jeg_video_content\"><iframe loading=\"lazy\" title=\"Offer in compromise application : 10 Key Decider  Facts that decides fate of your\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/dkQaimCiP2I?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_IRS_does_not_accept_offers_in_compromise_automatically\"><\/span>2. IRS does not accept offers. in compromise automatically<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>IRS does not automatically accept your Offer in Compromise or OIC in short. According to the IRS data book, the IRS acceptance rate for OIC applications in 2021 was 31%. This shows that the majority of applications for offers in compromise are rejected. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Test_Your_Eligibility_for_Offer_in_Compromise\"><\/span>3. Test Your Eligibility for Offer in Compromise<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The IRS website provides a free tool called <a data-summari-detected=\"true\" data-summari-has-summary=\"false\" href=\"https:\/\/irs.treasury.gov\/oic_pre_qualifier\/\" target=\"_blank\" rel=\"noopener\">Offer In Compromise Pre-Qualifie<\/a>r. See the description below for the link. Use it to understand whether your application may succeed or not. IRS has put a very relevant that assists in gathering the information needed for deciding your eligibility instantly. The speciality of this tool is also that it is a calculator for determining a preliminary offer amount.<\/p>\n\n\n\n<iframe loading=\"lazy\" src=\"https:\/\/gsheetpress.com\/calculator?id=1666083573056\" name=\"calculator\" frameborder=\"no\" width=\"950px\" height=\"850px\" align=\"center\"><\/iframe>\n\n\n\n<p>We have also created, for your help, a simple yes-no type prequalified test that can show prima facia if you are suitable for filing an application for tax debt relief under the offer in compromise policy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_What_is_the_fee_for_an_offer_in_compromise_IRS_application\"><\/span>4. What is the fee for an offer in compromise IRS application?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There is a fee of $205 for the submission of the Offer in the compromise application. However, the fee is waived for people below the poverty line. So, if you are one of them, Include a Low-income certificate with the application. Sole proprietors are also considered individuals for fee waiver purposes.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_For_which_years_can_IRS_consider_an_offer_in_a_compromise_application\"><\/span>5. For which years can IRS consider an offer in a compromise application?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Offer in Compromise is available only for tax years you are assessed by the IRS. Any tax years or periods that have not been assessed are not eligible.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_Are_you_current_with_tax_filing_estimated_tax\"><\/span>6. Are you current with tax filing &amp; estimated tax?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Have you filed all tax returns, including the current year? You must have <a href=\"https:\/\/www.irstaxapp.com\/irs-tax-penalty-calculator\/\">filed all tax returns<\/a> and must have made all <strong><em>estimated tax payments<\/em><\/strong> due on your current tax return. Suppose you are a business owner with employees to be eligible for an Offer in Compromise. In that case, you must have deposited all required federal tax for the current quarter and the two preceding quarters.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7No_OIC_if_Filed_for_Bankruptcy_proceedings\"><\/span>7.No OIC if Filed for Bankruptcy proceedings<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Both, the Offer in Compromise program of the IRS and the Bankruptcy Proceeding filed in a court, may solve the tax debt, but both can not be approached at the same time. If you have already initiated bankruptcy proceedings, you would not be eligible for an Offer in Compromise. In fact, if the taxpayer files for bankruptcy after the OIC process has started, IRS will return the OIC application without the possibility of an appeal.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"8_What_is_IRS_Collection_Information_Statement\"><\/span>8. What is IRS Collection Information Statement?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Depending on your status, IRS will require you to complete an IRS Collection Information Statement, either in Form 433-A or Form 433B. These statements provide the IRS with extensive and detailed personal financial information that helps them decide the application for offer-in-compromise.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Who needs to fill out Form 433-A (OIC)?<\/h3>\n\n\n\n<p>if you are an individual wage earner, operate or operated as a sole proprietor, or are authorized to submit an offer on behalf of the estate of a deceased individual. If you are married but living separately from your spouse, you must submit Form 433-A (OIC). This will assist in the calculation of an appropriate offer amount based on your assets, income, expenses, and future earning potential. You will have the opportunity to provide a written explanation of any special circumstances that affect your financial situation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Who needs to fill out Form 433-B (OIC)?<\/h3>\n\n\n\n<p>Fill out Form 433-B (OIC) if the business is a Corporation, Partnership, or LLC. This will assist in the calculation of an appropriate offer amount based on the business assets, income, expenses, and future earning potential. If the business has assets used to produce income (for example, a tow truck used in the business for towing vehicles), the business may be allowed to exclude equity in these<br>assets.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"9_Where_to_Get_the_Offer_in_compromise_IRS_form\"><\/span>9. Where to Get the Offer in compromise IRS form?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>You need to file two forms -one is Form 656 and one out of the following two forms, based on your circumstance.<\/p>\n\n\n\n<ol><li>For an OIC based on doubt as to collectibility or based on effective tax administration<ol><li>Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-Employed Individuals<\/li><li>Form 433-B (OIC), Collection Information Statement for Businesses <\/li><li>Both forms can be found in this <a data-summari-detected=\"true\" data-summari-has-summary=\"false\" href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f656b.pdf\" target=\"_blank\" rel=\"noopener\">IRS booklet<\/a><\/li><\/ol><\/li><li>For an OIC based on doubt as to liability, download the following forms: <a data-summari-detected=\"true\" data-summari-has-summary=\"false\" href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f656l.pdf\" target=\"_blank\" rel=\"noopener\">Form 656-L<\/a>\u00a0<\/li><\/ol>\n\n\n\n<p class=\"has-background\" style=\"background-color:#bef6e0\"><strong>Have you checked our <em>offer in compromise IRS calculator<\/em> that helps in estimating the initial payment of the offer amount?<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"10_Fourcommon_reasons_IRS_reject_your_offer_in_compromise\"><\/span>10. Fourcommon reasons IRS reject your offer in compromise<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There can be many reasons for the rejection of an offer in compromise, following four are the most common reasons, as found by tax professionals<\/p>\n\n\n\n<ol><li>The offer is too low, which goes against the IRS&#8217;s view of the potential of collection from your income and assets.<\/li><li>IRS feels that you have not provided complete information substantiating your financial condition.<\/li><li>You did not pay your current year&#8217;s tax liability.<\/li><li>You\u2019ve been convicted of a serious crime.<\/li><\/ol>\n","protected":false},"excerpt":{"rendered":"<p>Whether the Offer in Compromise IRS accepts or rejects depends on your application&#8217;s unique facts and circumstances. Acceptance of your Offer in Compromise application by the IRS will depend on many factors, including your ability to pay debts, income, expenditure, assets etc. Remember, as a general rule, the IRS approves an Offer in Compromise when [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":5585,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[54],"tags":[],"amp_enabled":false,"_links":{"self":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/825"}],"collection":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/comments?post=825"}],"version-history":[{"count":0,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/825\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media\/5585"}],"wp:attachment":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media?parent=825"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/categories?post=825"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/tags?post=825"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}