Mistakes That Can Get An Offer In Compromise Rejected.
Offer in compromise is an amazing option to get a relief from a giant tax debt, although it is not uncommon to have an OIC rejected. Obviously, it happens because of the mistakes made while filling the OIC. Here are the most common mistakes that tax professionals make while dealing with OIC case: 1: Ignoring their clients' current tax compliance: It is a condition of applying for an offer in compromise that the taxpayer remains compliant with all the tax liabilities. From compliance with tax liabilities, it means that taxpayer has paid the proper taxes or they have had the taxes withheld from their salaries. Failing to do so will get the OIC canceled. 2: Failing to match eligibility criteria: IRS has set eligibility criteria for filling OIC. Ignoring those and still applying will only result in a waste of time and money. Eventually, the application will be rejected. 3: Incorrect information in the form: At times you put incorrect information specifically numbers like tax amount, income etc. It is highly advised to do proper calculations, double check the figures and be confident in each and every amount you put in form 656 and 433-A. IRS is not going to accept any figure without checking its authenticity. 4: Not using Bankruptcy factor: Using bankruptcy threat for your client can help you get the OIC accepted. Even IRS allows taxpayers to compare what the IRS would receive from bankruptcy to what the IRS would receive from an accepted offer in compromise. 5: Ignoring statute of limitation: Statute of limitation is the time frame (generally 10 years) in which IRS can collect taxes from a taxpayer starting from the date of assessment of tax liability. Usually, if your client’s statute of limitation period is nearing to end the applying for OIC is not the right thing to do. Instead, you should try to get the client to be deemed uncollectible. Source: www.kpateloffice.com, www.faithfirm.com