OIC and the IRS | Tax Tiger Offers a Simple Comparison

Tax Tiger

An Offer in Compromise is similar to bankruptcy proceedings, says Tax Tiger.

According to Tax Tiger, over 1.5 million Americans file for personal bankruptcy each year. This number isn’t surprising given the current state of the economy, says Tax Tiger. However, far fewer eligible taxpayers file for debt forgiveness with the IRS, even when they know they cannot pay. Tax Tiger believes the numbers are in such stark contrast because of the fear most taxpayers have of dealing with the IRS.

The IRS, says Tax Tiger, has a program similar to bankruptcy that can keep the taxpayer out of court and thus out of trouble with Uncle Sam. This option is called an Offer in Compromise and takes into consideration many factors in common with a typical bankruptcy hearing, including ability to repay the debt and assets to liabilities ratio, says Tax Tiger.

There are three circumstances that allow a taxpayer to negotiate an OIC, reports Tax Tiger. The most common is the taxpayer’s ability to satisfy the debt, followed by the Effective Tax Administration (extenuating economic circumstances), and, very rarely, an incorrectly assessed tax. Once a taxpayer has made up his or her mind that they are ready to seek resolution with the IRS, Tax Tiger is there to step in and negotiate on their behalf.

If the IRS is willing to negotiate the debt, Tax Tiger will work with a taxpayer to determine which of three payment options is best for their current financial state. According to Tax Tiger, option one involves paying in full, in cash, in 90 days or less. Options two and three allow the taxpayer to divvy up payments over time. A Short-Term Deferred payment plan splits the negotiated amount up anywhere from greater than three months to two years. Tax Tiger points out that the final payment arrangement is longer in term, and lasts as long as the collection statute. Tax Tiger notes that the IRS will cease collection action against the taxpayer throughout the negotiation process.

Tax Tiger has extensive experience negotiating with the IRS on Offers in Compromise and numerous other tax resolution options. The team points to over a decade of successful cases in the company’s history by a staff of professionals who are held to the highest industry standards. For more information about Tax Tiger, please visit www.tax-tiger.com or follow them on Twitter @TaxTiger.