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IRS Offer in Compromise OIC agreement and Pen

Offer in Compromise Eligibility

EH Law Group Jan. 30, 2024

Life can take unexpected twists and turns, leading many of us down a road of financial uncertainty. It's during these challenging times that the concept of an Offer in Compromise (OIC) becomes a beacon of hope. An OIC is a special agreement between a taxpayer and the IRS, allowing the taxpayer to settle their tax debts for less than the full amount they owe. But while it may sound simple, navigating this process can be anything but. That's where the knowledge of a seasoned law group becomes invaluable.

At EH Law Group, we're not just attorneys—we're your allies. With years of experience under our belts, we understand the ins and outs of the OIC process. Our team has been guiding clients in San Mateo, California, and surrounding areas through the intricacies of tax laws since 2006. We don't just provide legal advice; we offer a lifeline when you're feeling overwhelmed by mounting tax debts. We're here to help you explore your options, understand your eligibility for an Offer in Compromise, and complete the application process.

What Is an Offer in Compromise? 

An Offer in Compromise is essentially a lifeline thrown by the IRS to individuals drowning in tax debt. It's a program that allows folks to settle their tax liabilities for less than the full amount owed. Sounds like a dream come true, right? Well, it can be. But it's also a complex process that requires careful navigation.

That's where we come in. Our experienced attorneys at EH Law Group, located in San Mateo, California, are well-versed in all things OIC. We provide assistance to clients throughout the surrounding areas, including San Francisco, Santa Clara County, Oakland, Daly City, and South San Francisco. 

Payment Options for Offer in Compromise 

So, how do you pay for an Offer in Compromise?

There are two primary options: a lump sum cash offer or a periodic payment offer.

The lump sum cash offer is pretty straightforward. You pay the settlement amount in full within 90 days of the IRS accepting your offer. It's a great option if you have access to a significant amount of cash or can borrow the necessary funds.

On the other hand, a periodic payment offer allows you to make monthly installment payments over a period of up to 24 months. The first payment must be submitted with the offer, and subsequent payments must be made while the IRS is evaluating the offer. This option provides more flexibility, especially for those who can't afford to pay the settlement amount in one go. 

Eligibility for Offer in Compromise 

Before you get too excited about the possibility of an Offer in Compromise, it's important to understand that not everyone qualifies. The Internal Revenue Service (IRS) has stringent eligibility criteria in place.

They carefully assess factors such as your income, expenses, asset equity, and future earning potential. In general, you may be eligible for an Offer in Compromise if you can provide compelling evidence demonstrating that you are genuinely unable to pay your tax debt in full or that doing so would lead to significant financial hardship. It's crucial to thoroughly evaluate your financial situation and consult with a tax professional to determine if pursuing an Offer in Compromise is the right option for you. 

The Process of Offer in Compromise 

The OIC process all starts with submitting a completed Form 656, Offer in Compromise, along with the required documentation and application fee. Then, the IRS reviews your offer and may request additional information or documentation.

It's crucial to provide accurate and complete information to avoid delays or rejection of the offer. Once the IRS accepts the offer, you must stick to the agreed-upon payment terms and fulfill all your tax obligations moving forward. 

Why You Should Get Legal Support for Offer in Compromise 

Understanding what an Offer in Compromise is no easy task. That's why it's highly recommended to seek legal support. Our seasoned attorneys at EH Law Group are here to guide you every step of the way. We'll help determine if an OIC is the right option for your specific situation, assist in preparing the necessary documentation, negotiate with the IRS on your behalf, and ensure compliance with all requirements.

With our experience, you can increase your chances of a successful OIC and achieve the best possible outcome. So, why not reach out today and take your first steps toward financial relief? One phone call can drastically change the quality of your life in the short- and long-term.