The IRS Audit Blog

Question: Has anyone out there used the IRS “Offer in Compromise” and can they tell me how it worked for them?

If you just fill out the IRS form and send the IRS your cash offer, it seems like they could simply take the money and reject your offer and demand more. Shouldn’t there be some sort of negotiation prior to the form submission?

Answer: Your form *is* the negotiation. However, most OICs are rejected due to unreasonable expectations by the taxpayer.

The form 656 includes a calculation of the minimum offer the IRS will consider. If your offer is below that, don’t bother.

The IRS has a “reasonable collection potential” of roughly the value of your assets if you sold them and 48 months of monthly payments…. You can’t say, here’s all my spare cash at the moment and let’s cut a deal.

(Note, JKHarris, one of the big firms that uses the pennies on the dollar tv pitches was sued by 18 states because they failed to be realistic about what a taxpayer could expect.)

Taxpayer advocate to IRS: Don’t lien too heavily

The tax man has gotten a lot more aggressive in slapping liens on taxpayers who are seriously delinquent in their payments.

irs tax help and Offer in compromise

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