Offers in CompromiseDuring this “Offer heyday” thousands of Offers were accepted and these companies were many times successful (though never as much as they claimed). However, the very success of the program produced a backlash at the IRS, and since the program allows for significant IRS discretion, the Service has made qualifying for an Offer much more difficult. For an Offer to succeed, the taxpayer much show that their financial condition is such that they will never be able to pay their liabilities in full before the 10-year Statute of Limitations on Collections is up. This requirement, along with the future income calculation, make it very unlikely an Offer will be accepted. The IRS has created an OIC Pre-qualifier Tool at: OIC Pre-qualifier Tool to help taxpayers figure out if they will qualify for an Offer in Compromise. Taxpayers should take advantage of this tool before assuming they can settle for “Pennies on the Dollar”.

During this “Offer heyday,” thousands of Offers were accepted and these companies were many times successful (though never as much as they claimed). However, the very success of the program produced a backlash at the IRS, and since the program allows for significant IRS discretion, the Service has made qualifying for an Offer much more difficult. For an Offer to succeed, the taxpayer much show that their financial condition is such that they will never be able to pay their liabilities in full before the 10-year Statute of Limitations on Collections is up. This requirement, along with the future income calculation, make it very unlikely an Offer will be accepted. The IRS has created an OIC Prequalifier Tool at: http://irs.treasury.gov/oic_pre_qualifier/ to help taxpayers figure out if they will qualify for an Offer in Compromise. Taxpayers should take advantage of this tool before assuming they can settle for “Pennies on the Dollar”.