At True Resolve Tax Professionals in Denver, Colorado we often have to explain to our clients that an offer in compromise is no easy way out. While there are numerous “settle your IRS debt for pennies on the dollar” ads from less than reputable companies, the reality is that the process is incredibly intricate and complicated, and there are no guarantees that you’ll even be approved. Most importantly, taking it on by yourself can often lead to making a bad problem worse.
Let’s take a closer look at the truth about the Offer in Compromise (OIC) option for IRS tax debts.
The IRS Wants to Collect Your Debt in Full
An offer in compromise is an agreement between a taxpayer and the Internal Revenue Service to settle a tax debt for less than the full amount owed. Now, just because you want to make a deal doesn’t mean the IRS is willing to cooperate. In fact, rejections are hovering at about 60% (and that’s an improvement over previous years). Ultimately, the IRS wants to collect your tax debt in full. It will be entirely up to you to prove that you absolutely do not have the means to repay now, as well as in the foreseeable future.
Even with relaxed rules implemented with its Fresh Start program, an offer in compromise is no easy way out. The process of proving your inability to pay your debt by any other means, such as a standard, 6-year installment agreement, is incredibly invasive and complicated. Along with submitting complex tax forms, you will be required prove your financial hardship by handing over bank statements, pay check stubs, mortgage and car payment receipts, and much more.
Now, here’s a downside that many people don’t take into consideration, especially when attempting the OIC process on their own. By turning all of this financial information over to the IRS, they’ll know exactly how much money they can get from you, and instead of an approval, you could wind up with even more intense IRS collections against you. Your advantage is lost, and you could be in an even worse situation.
When It Sounds Too Good to be True
Next time you hear or see an ad for one of these crooked tax relief places, just remember that it’s smoke and mirrors. The IRS is one of the strictest and most aggressive debt collectors in the country. They have the power to levy and seize your assets, empty out your bank account and heavily garnish your wages. They don’t wheel and deal. They want their money even if that means creating financial disaster for you.
When you choose True Resolve Tax Professionals in Denver to help you with an offer in compromise, one of our licensed, IRS Enrolled Agents will first conduct a thorough pre-qualification review of your tax debt and finances. We won’t lead you into the offer in compromise process unless we strongly believe that you’ll be approved. This approach has enabled us to achieve an OIC acceptance rate of 95% or higher.
If you’re facing individual tax debt problems, an offer in compromise is no easy way out. You will need honest, expert guidance from licensed and experienced experts. The True Resolve Tax Professionals in Denver will assess your situation, provide you with actionable solutions, and set realistic expectations. We will negotiate with the IRS on your behalf and act as your advocate, working relentlessly to achieve a positive outcome. If you’re considering an offer in compromise, contact us first. We’ll start with a 30-minute consultation to determine how to take the first step toward true tax debt relief.