Offer in Compromise or OIC is an agreement between the Internal Revenue Service (IRS) and the Hawaiian taxpayer which may allow the taxpayer to settle their IRS tax debt for less than the total amount owed.  The Internal Revenue Service will only accept an OIC offer if the taxpayer meets certain conditions and the tax amount can not be paid in full or through an installment agreement.

The IRS does not accept all OIC offers, in fact, they currently deny up to 80%.  The IRS may be willing to accept an offer if they believe it will put the taxpayer in a position to meet all future tax debt obligations.  Failure to pay tax debt can result in wage garnishment, property repossession or bank account levies.

Hawaiian taxpayers who are considering an Offer in Compromise may want to contact a tax professional. Offer in Compromise can be expensive, time consuming and difficult to implement. It is only one option for Hawaiian taxpayers and may not be the best option.

Three types of Offer in Compromises:

1. Doubt as to Collectibility - The IRS doubts the Hawaiian taxpayer will be able to pay the full amount of their tax debt within the statutory time for tax collection.

2. Doubt as to Liability- There must be a legitimate doubt that the amount of IRS tax debt assessed against the Hawaiian taxpayer is correct. This can occur if the IRS examiner made a mistake in the interpretation of the law, the IRS examiner did not consider all of the taxpayer’s financial evidence, or the Hawaiian taxpayer can produce new evidence for the IRS.

3. Effective Tax Administration- The amount of tax debt assessed is correct and the IRS may be able to collect the tax debt, but there is some extenuating circumstance which makes the IRS think payment of the tax debt would cause an economic hardship which is unfair or inequitable.

Rejection of Offer in Compromise in Hawaii

The Internal Revenue Service has been given sole authority to collect taxes and to determine if they will accept Offer in Compromise offers. If the IRS denies a Hawaiian taxpayer’s OIC offer, the taxpayer may be able to appeal the decision, but they will not have any other legal recourse against the IRS.

If the IRS denies an OIC offer they will send written notification to the taxpayer identifying the reason for the denial. If the IRS determines the OIC offer is too low, they may be willing to provide a counter offer or negotiate with the taxpayer to find an offer which is agreeable to both the government and the Hawaiian taxpayer. If the IRS does not provide Offer in Compromise information to the taxpayer this information can be requested under the Freedom of Information Act.

Appealing an Offer in Compromise in Hawaii

Informal negotiations can often be done by contacting the IRS administrator who made the first OIC denial decision. If a taxpayer wants to make a more formal appeal they will need to send written notice to the IRS within thirty-days from the date of the OIC denial letter.

The formal written request for an OIC appeal must have the following information:

• Social Security number, telephone number, name and address
• A statement that the taxpayer is appealing the IRS ruling to the Appeal’s office.
• A copy of the letter sent to the taxpayer and the taxpayer’s proposed changes or items that the taxpayer wants changed and what the taxpayer does not agree with and why.
• Document the tax periods or years in question.
• Identify any tax laws or other authorities which may support the position.
• Identify any facts that may support the position with which the taxpayer disagrees.
• The taxpayer must sign the written protest under penalty of perjury.

Hawaiian taxpayers may represent themselves for all OIC appeals, but taxpayers may want to talk to a tax professional such as a tax attorney, certified public accountant or enrolled agent who can answer OIC questions.

Completing an Offer in Compromise

Hawaiian taxpayers must complete the following tasks:

• Hawaiian taxpayers must complete all OIC forms and submit them to the Internal Revenue Service.
• Hawaiian taxpayers must submit all requested financial data to the Internal Revenue Service. Financial information includes: taxpayer’s pay stubs, banking and car information.
• Hawaiian taxpayers must complete and send all federal tax returns to the Internal Revenue Service on or before the federal tax deadline for the next five years.
• All self-employed Hawaiian taxpayers must pay their estimated IRS taxes and submit their federal tax returns every quarter.
• All tax payments (except the amount outlined in the OIC agreement) must be paid by Hawaiian taxpayers for the next five years.
• Hawaiian taxpayers must pay the amount outlined in the Offer in Compromise agreement.
• The IRS will apply any federal tax refund to the Hawaiian taxpayer’s tax debt for the calendar year that the OIC is approved.

The IRS has the authority to terminate an Offer in Compromise if all the terms and conditions of the agreement are not met. If the Offer in Compromise is terminated, the IRS can charge the taxpayer the original amount of tax debt.

Offer in Compromise Forms

1. IRS Form 656- Offer in Compromise. Hawaiian taxpayers must submit IRS Form 656 to the Internal Revenue Service to provide detailed financial information about the taxpayer and their ability to pay their tax debt.
2. IRS Form 443 A- Collection Information Statement for Wage Earners and Self-Employed Individuals. Form 443-A provides additional information about the Hawaiian taxpayer and their ability to pay their federal tax debt.
3. IRS Form 443-B- Collection Information Statement for Businesses. Hawaiian taxpayers will need to submit IRS Form 433-B to the Internal Revenue Service if a taxpayer’s business tax debt is included in the Offer in Compromise.
4. IRS Form 656-A- Income Certification for Offer in Compromise Application Fee and Payment. Hawaiian taxpayers who request an Offer in Compromise fee waiver must submit Form 565-A.

The Internal Revenue Service (IRS) offers a variety of tax settlement options for Maryland taxpayers who would like to settle their IRS tax debt. Offer in Compromise is one these options and may allow Maryland taxpayers to settle their debt for a fraction of the total amount owed.

Offer in Compromise or OIC allows Maryland taxpayers to make an “offer” to the IRS and if the IRS decides to take the offer, it will be considered a compromise settlement for outstanding tax debt. One of the main reasons the IRS may be willing to accept an OIC is it may eliminate the need for the IRS to accept an extended settlement agreement.

The IRS currently accepts approximate 25% of all OIC offers but will only do so if they believe the taxpayer would suffer an unreasonable hardship if the tax was paid, the amount of tax debt may not be accurate or the IRS may not be able to collect the tax debt.

The IRS has been given the authority to collect taxes by the federal government and if Maryland taxpayers fail to pay their tax debt the IRS is authorized to use a variety of aggressive collection methods to collect the debt including: wage garnishments, property repossessions or bank levies.

Maryland taxpayers who have excessive tax debt and are considering Offer in Compromise may want to contact a tax professional for more information. OIC can be time consuming and expensive. Offer in Compromise is only one of several available tax settlement options and it may not be the best one for all Maryland taxpayers.

Qualifying for Offer in Compromise in Maryland

Maryland taxpayers who want an Offer in Compromise must meet one of the following requirements:

Doubt as to Liability - Maryland taxpayers may qualify for an Offer in Compromise if there is some doubt as to the accuracy of the amount of tax debt which has been assessed. This requirement is seldom met.

Doubt as to Collectibility -  Maryland taxpayers may qualify for an Offer in Compromise if the IRS determines it is unlikely the tax debt will every be collected either now or in the future. The IRS may also decide to grant an OIC if they determine trying to collect the tax debt is too expensive.

Effective Tax Administration- Maryland taxpayers who may suffer “an inequitable or unfair hardship” by paying outstanding IRS tax debt may qualify for an Offer in Compromise. This option is most frequently used by the elderly and the disabled.

Rejection of Offer in Compromise in Maryland

The Internal Revenue Service will deny most Offer in Compromise offers. The IRS has the authority to accept an offer and if they choose to deny the OIC, Maryland taxpayers will not have the legal authority to sue the IRS.

All denial letters must include a reason for the denial and if the offer was considered too low, the IRS may be willing to make a counter offer to help the government and the Maryland taxpayer find to an OIC offer which is agreeable to both parties. If the IRS refuses to provide Offer in Compromise information to the taxpayer, it can be requested under the Freedom of Information Act.

Appealing an Offer in Compromise in Maryland

The first step in OIC negotiations is to contact the IRS administrator who made the first Offer in Compromise denial decision. More formal OIC appeals can be made by sending an appeal letter to the Internal Revenue Service within 30 days from the date of the denial letter.

Maryland taxpayers must submit new Offer in Compromise forms if the Offer in Compromise appeal deadline has past or if their financial status has substantially changed.

Completing an Offer in Compromise

All of the following tasks must be completed by Maryland taxpayers for an Offer in Compromise:

• Maryland taxpayers must complete all Offer in Compromise forms and send them to the IRS.
• Maryland taxpayers must send their financial data to the Internal Revenue Service in a timely fashion. Financial information includes: Maryland taxpayer’s pay stubs, banking and vehicle information.
• Maryland taxpayers must complete and send all federal tax returns to the IRS on or before the tax deadline for the next 5 years.
• All self-employed Maryland taxpayers must pay their estimated federal taxes and file their tax returns every quarter.
• All tax payments (except the amount outlined in the Offer in Compromise) must be paid by Maryland taxpayers for the next 5 years.
• Maryland taxpayers must pay the amount outlined in the OIC.
• All refunds will be applied to the Maryland taxpayer’s federal tax debt before the Offer in Compromise is accepted.
• The IRS will apply any IRS tax refund to the Maryland taxpayer’s tax debt for the calendar year that the Offer in Compromise is approved.

Maryland taxpayers who do not complete the previous actions may have their Offer in Compromise terminated and the IRS may reinstate the full amount of their IRS tax.

Offer in Compromise Forms

1. IRS Form 656- Offer in Compromise. Maryland taxpayers must submit IRS Form 656 to the IRS to provide detailed financial information about the taxpayer’s ability to pay their tax debt.
2. IRS Form 443 A- Collection Information Statement for Wage Earners and Self-Employed Individuals. Form 443-A provides additional information to the IRS about the ability of the Maryland taxpayer to pay their federal tax debt.
3. IRS Form 443-B- Collection Information Statement for Businesses. Form 433-B provides information to the Internal Revenue Service about the Maryland taxpayer’s business. This form will only need to be sent to the IRS if the business tax debt is included in the Offer in Compromise agreement.
4. IRS Form 656-A- Income Certification for Offer in Compromise Application Fee and Payment. Maryland taxpayers who are requesting an Offer in Compromise fee waiver must submit this form.

Georgia taxpayers who owe federal back taxes have several IRS tax settlement options available to settle the debt. One of the most common programs is Offer in Compromise or OIC. Offer in Compromise allows the taxpayer to make an “offer” for less than the full amount of tax debt owed and the Internal Revenue Service (IRS) will either choose to accept or reject the offer. If the IRS decides to accept the offer, it is considered a “compromise” and will completely settle the IRS tax debt. The IRS has an incentive to accept OIC offers because it allows them to avoid declaring a tax debt as not collectible or extend the payment period with a protracted installment agreement.

The federal government has given the Internal Revenue Service the authority to collect tax debt from United States taxpayers. With this authority, the IRS also has sole discretion to accept or decline Offer in Compromise offers.  The IRS frequently will settle IRS tax debt if they believe the debt is unlikely to be collected, there is question to the amount of tax debt owed or if paying the taxes will cause a Georgia taxpayer extreme financial difficulty. Currently the Internal Revenue Service accepts approximately 25% of the initial Offer in Compromise offers. Unfortunately, if the IRS declines the OIC offer, the Georgia taxpayer will have no legal recourse against the IRS and the IRS can continue their aggressive debt collection efforts with the detailed information the Georgia taxpayer has provided.

All Georgia residents who are considering an Offer in Compromise should contact a tax professional for assistance. Offer in Compromise can be a complicated, time consuming and expensive tax settlement option. Penalties and interest will continue to accrue until the offer is accepted. There are several IRS tax settlement options available to eliminate tax debt and Offer in Compromise may not be the best option for all Georgia taxpayers.

Qualifying for Offer in Compromise in Georgia

For a Georgia taxpayer to qualify for Offer in Compromise, they must meet one of the following conditions:

Doubt as to Liability - The Internal Revenue Service must agree that there is some doubt as to the amount of IRS tax debt which has been assessed to the Georgia taxpayer. This condition is not often met.

Doubt as to Collectibility - The Internal Revenue Service must agree that it is unlikely that the assessed taxed liability will be collected now or in the future or the IRS considers the cost to collect the tax debt too high.

Effective Tax Administration-  Under certain conditions, collection of the IRS tax debt will cause a Georgia taxpayer an economic hardship which would be inequitable or unfair. If the IRS agrees, they will accept an Offer in Compromise. This condition is most frequently accepted for the elderly and handicapped.

Rejection of Offer in Compromise in Georgia

Up to 80% of Offer in Compromise offers will be declined. More will be accepted after a series of negotiations or a formal appeal. If the IRS rejects a Georgia taxpayer’s offer they are required to send written notification outlining the reason for the denial and what amount they would consider reasonable to settle the debt. New OIC forms will only have to be resubmitted if the OIC deadline has passed or if the taxpayer’s financial information has significantly changed. All Offer in Compromise information is available to Georgia taxpayers under the Freedom of Information Act.

Appealing an Offer in Compromise in Georgia

Informal negotiations to request an OIC reconsideration can be made by contacting the IRS administrator who made the first OIC denial decision. The IRS frequently negotiates with the taxpayer to find an offer which is acceptable to the Georgia taxpayer and the IRS. If informal negotiations fail, Georgia taxpayers can make a more formal written appeal to the Internal Revenue Service with in thirty days from the date of the OIC denial letter.

Completing an Offer in Compromise

To file an Offer in Compromise the Georgia taxpayer will have to complete the following tasks:

• Submit a series of Offer in Compromise forms and financial documents to the Internal Revenue Service. OIC required documentation can include: Georgia taxpayer’s pay stubs, bank records, and vehicle information.
• Georgia taxpayers will have to file all Internal Revenue Service federal tax returns on or before the federal tax deadline for the next 5 years
• All self-employed Georgia workers will have to make estimated federal tax payments and file all federal tax returns each quarter
• Georgia taxpayers must pay all Internal Revenue Service federal tax payments (excluding the amount outlined in the OIC offer) for the next 5 years
• Georgia taxpayers must agree to pay the amount outlined in the Offer in Compromise agreement
• Georgia taxpayers must agree to let the Internal Revenue service keep all IRS tax refunds and apply them to the tax debt prior to submitting the Offer in Compromise
• The IRS will apply any tax refund to the Georgia taxpayers back taxes for the calendar year that the OIC is approved

Failure to fulfill the terms outlined in the OIC agreement can give the Internal Revenue Service the legal right to revoke the Offer in Compromise and charge the Georgia taxpayer with the full amount of IRS tax debt.

Offer in Compromise Forms

1. IRS Form 656- Offer in Compromise. IRS Form 656 provides financial information to the Internal Revenue Service about the Georgia taxpayer’s financial status and their ability to repay their IRS tax debt.
2. IRS Form 443 A- Collection Information Statement for Wage Earners and Self-Employed Individuals. Form 443-A provides additional financial information to the Internal Revenue Service about the Georgia taxpayer’s ability to pay their tax debt.
3. IRS Form 443-B- Collection Information Statement for Businesses. Form 433-B provides information to the IRS about the Georgia taxpayer’s business.  Georgia taxpayers are required to submit tax Form 433-B if their business tax debt is included in the Offer in Compromise.
4. IRS Form 656-A- Income Certification for Offer in Compromise Application Fee and Payment. Georgia taxpayers must complete this form if they are requesting the Offer in Compromise fee waiver.

Michigan taxpayers may be able to settle their IRS tax debt with an IRS Offer in Compromise. The Offer in Compromise or OIC allows a taxpayer to make an offer to the Internal Revenue Service (IRS) for less than the total amount of tax debt owed. This compromise offer, if accepted, will settle all outstanding tax debt outlined in the Offer in Compromise agreement. The IRS may be willing to accept an OIC if it allows Michigan taxpayers to meet all of their future tax liabilities. An Offer in Compromise may allow the IRS to avoid declaring debt as currently not collectible or extending the debt collection efforts through a protracted installment agreement.

The IRS has the authority from the federal government to collect taxes to fund the activities of the United States government. They also have sole discretion to accept or deny any OIC offers made by Michigan taxpayers. The IRS may accept an Offer in Compromise if they doubt their ability to collect the debt, believe there may be some discrepancy in the amount of tax owed or paying the debt may cause economic hardship for the taxpayer.

The IRS denies approximately eighty-percent of the Offer in Compromise offers at the application level (more are accepted after negotiations). If the IRS denies the Offer in Compromise offer they can use the information they have collected from the Michigan taxpayer to continue their tax collection actions. Michigan residents who are considering an Offer in Compromise should contact a tax professional. The Offer in Compromise process can be complicated, expensive and time consuming and may not be the best option for all Michigan taxpayers. Interest and penalties will continue to accrue while the OIC is under consideration.

Qualifying for Offer in Compromise in Michigan

All Michigan residents who are filing an Offer in Compromise must meet one of the following conditions:

Doubt as to Liability - Michigan taxpayers must prove the examiner has incorrectly interpreted the law, did not consider all the relevant Michigan taxpayer’s evidence, or the taxpayer can show new information proving the amount of tax liability which has been assessed is not correct.

Doubt as to Collectibility - The Internal Revenue Service must believe they will be unable to collect tax debt either now or in the future.

Effective Tax Administration- Michigan taxpayers who can prove paying federal tax debt will cause an economic hardship which would be inequitable or unfair may qualify for an Offer in  Compromise.  The elderly who can not find employment, individuals with disabilities or individuals who have exorbitant medical bills or who care for a sick family member all may meet this condition.

Rejection of Offer in Compromise in Michigan

The Internal Revenue Service will deny most Offer in Compromise offers. Offers which are denied may be negotiated or the Michigan taxpayer may make a formal appeal. The IRS must send the Michigan taxpayer written notification for the OIC denial which details the reason the Offer in Compromise has been denied and the amount the IRS would accept to settle the tax debt. Michigan taxpayers must resubmit the Offer in Compromise tax forms only if they have missed the appeal deadline or if their financial status has drastically changed. If the IRS does not provide information about the Offer in Compromise denial Michigan taxpayers have the legal authority to request information under the Freedom of Information Act.

Appealing an Offer in Compromise in Michigan

Michigan taxpayers can make an informal appeal to the IRS administrator who denied the OIC application. If negotiations fail, a more formal appeal can be made. The formal appeal must be made in writing within 30 days from the date of the Offer in Compromise denial letter. The IRS frequently negotiates with the taxpayer to find an offer which is agreeable to both the Internal Revenue Service and the taxpayer.

Completing an Offer in Compromise

Michigan taxpayers must complete the following tasks if they are applying for an Offer in Compromise:

• Michigan taxpayers must fill out and submit all of the appropriate OIC forms and financial information. Documentation can include: Michigan taxpayer’s pay stubs, bank records, and car information.
• Michigan taxpayers will have to file all IRS federal tax returns on or before the federal tax deadline for the next five years.
• All self-employed Michigan taxpayers must make estimated federal tax payments and file their tax returns each quarter.
• Michigan taxpayers must pay all IRS federal tax payments (excluding the amount outlined in the Offer in Compromise offer) for the next five years.
• Michigan taxpayers must agree to pay the amount outlined in the Offer in Compromise agreement.
• The Internal Revenue service will use all IRS tax refunds and apply them to the tax debt prior to accepting the Offer in Compromise offer.
• The IRS will apply any tax refund to the Michigan taxpayers back taxes for the calendar year that the Offer in Compromise is approved.

The Internal Revenue Service has the legal authority to revoke the Offer in Compromise if the taxpayer fails to meet all of the terms in the OIC agreement.

Offer in Compromise Forms

1. IRS Form 656- Offer in Compromise. IRS Form 656 provides financial information to the Internal Revenue Service about the financial status of the Michigan taxpayer and their ability to repay their IRS tax debt.
2. IRS Form 443 A- Collection Information Statement for Wage Earners and Self-Employed Individuals. Form 443-A provides additional financial information about the financial status of the Michigan taxpayer to the Internal Revenue Service.
3. IRS Form 443-B- Collection Information Statement for Businesses. Form 433-B provides information about a Michigan taxpayer’s business finances. This form must only be submitted if the business tax debt is included in the Offer in Compromise.
4. IRS Form 656-A- Income Certification for Offer in Compromise Application Fee and Payment. This form must be completed by Michigan taxpayers who are requesting an Offer in Compromise fee waiver.

Nevada taxpayers can settle IRS tax debt with Offer in Compromise, a program established by the Internal Revenue Service (IRS). Offer in Compromise allows Nevada taxpayers to make an offer to settle their tax debt. The IRS may either accept or reject the offer. If the IRS accepts the offer, all the debt outlined in the Offer in Compromise is considered settled. Offer in Compromise allows the IRS to avoid declaring debt as currently not collectible or accepting a protracted installment agreement. OIC will allow the IRS to accept an amount to settle tax debt which is generally much less than the full amount owed and hopefully put the taxpayer in a financial position to meet all future tax liabilities.

The IRS has sole discretion to accept or reject all Offer in Compromise offers. They will only accept an OIC if they believe they will not be able to collect the debt from the Nevada taxpayer, paying the debt will cause substantial financial hardship to the taxpayer or if there is question about accuracy of the amount owed. Currently the IRS accepts approximately 25% of the OIC offers. More are accepted after negotiations or an appeal. If the IRS declines the OIC offer, they will be able to use the detailed financial information they have gathered to proceed with debt collection against the Nevada taxpayer. Penalties and interest will continue to accumulate while the IRS reviews the Offer in Compromise agreement.

Offer in Compromise can be complicated and expensive. All Nevada taxpayers who are considering an Offer in Compromise should contact a tax professional such as an enrolled agent, certified public accountant or tax attorney for more information. The IRS offers many options to settle taxes and OIC may not be the best option for all Nevada taxpayers.

Qualifying for Offer in Compromise in Nevada

All Nevada taxpayers must meet one of the following criteria to qualify for an OIC:

Doubt as to Liability - The taxpayer may qualify for an OIC if they can prove there was an error in calculation of the debt, an error in interpretation of the tax law, or new information has surfaced which can prove the tax liability was assessed incorrectly. This qualification is not frequently met.

Doubt as to Collectibility -  This qualification differs from the first. The amount of debt calculated and owed is not in question, just the ability of the Internal Revenue Service to collect the debt.

Effective Tax Administration- Nevada taxpayers who can prove that paying their tax debt will cause an economic hardship which would be inequitable or unfair may qualify for an OIC. This condition is most frequently accepted for the elderly and handicapped.

Rejection of Offer in Compromise in Nevada

The Internal Revenue Service denies approximately 25% of all OIC offers at the application level. More are accepted after negotiations or appeals. If the IRS denies a Nevada taxpayer’s OIC offer, they are required to send a written letter detailing the reasons the offer was not accepted. The IRS should be able to provide to the taxpayer a compromise settlement amount which they consider reasonable. Nevada taxpayers must resubmit the Offer in Compromise forms if their financial information has substantially changed or if the appeal’s deadline has passed. If the IRS refuses to provide the OIC information to the Nevada taxpayer, the Nevada taxpayer can request the information under the Freedom of Information Act.

Appealing an Offer in Compromise in Nevada

Nevada taxpayers can make an informal appeal to the IRS administrator who made the first OIC denial decision to reconsider or renegotiate an offer. If informal negotiations fail, Nevada taxpayers can make a formal appeal by writing a letter to the IRS within 30 days from the date of the Offer in Compromise denial letter. It is not unusual for the IRS to willingly negotiate to find a tax settlement amount which is agreeable to both the IRS and the Nevada taxpayer.

Completing an Offer in Compromise

Nevada taxpayers must complete the following tasks to qualify for an Offer in Compromise:

• All OIC forms must be submitted in a timely fashion as requested by the IRS. Documents and financial forms may include: Nevada taxpayer’s pay stubs, bank records, and vehicle information.
• All federal tax returns must be filed by the Nevada taxpayer on or before the federal tax deadline for the next five years.
• All self-employed Nevada taxpayers must make estimated federal tax payments and file all IRS tax returns each quarter.
• Nevada taxpayers must pay all of their federal tax payments (excluding the amount outlined in the OIC offer) for the next five years.
• Nevada taxpayers must pay the amount outlined in the Offer in Compromise agreement.
• The Internal Revenue Service will keep all IRS tax refunds and apply them to the tax debt prior to submitting the OIC.
• Any tax refund which would be made to the Nevada taxpayer for IRS back taxes for the calendar year that the OIC is approved will be paid toward the outstanding tax debt.

The IRS has full legal ability to cancel or revoke the OIC agreement if a Nevada taxpayer fails to meet all of the requirements of the agreement.  The IRS can also reinstate the full amount of tax owed.

Offer in Compromise Forms

1. IRS Form 656- Offer in Compromise. IRS Form 656 provides financial information to the Internal Revenue Service about the Nevada taxpayer, their financial status and their ability to pay their tax debt.
2. IRS Form 443 A- Collection Information Statement for Wage Earners and Self-Employed Individuals. Form 443-A provides additional information about the Nevada taxpayer’s ability to pay their tax debt to the IRS.
3. IRS Form 443-B- Collection Information Statement for Businesses. Form 433-B provides information to the IRS about the Nevada resident’s  business. Form 443-B will only need to be included with the OIC offer if Nevada taxpayer is including their business tax debt in the offer.
4. IRS Form 656-A- Income Certification for Offer in Compromise Application Fee and Payment. Form 656-A will only have to be submitted to the IRS if the Nevada taxpayer is requesting the Offer in Compromise fee waiver.

Financial difficulties may make it difficult for Illinois taxpayers to meet all of their financial obligations. The Internal Revenue Service (IRS) has created a variety of tax settlement options to help taxpayers settle their federal tax debt, often for far less than the full amount owed. Offer in Compromise is one of the popular IRS tax settlement options.

Offer in Compromise or OIC allows Illinois taxpayers to offer a settlement amount to the Internal Revenue Service. If the IRS considers the amount reasonable, they will accept it and will consider all tax liability outlined in the OIC agreement as settled. The main goal of the IRS, through Offer in Compromise, is to position Illinois taxpayers to meet all future tax obligations.

Not all OIC offers will be accepted by the IRS. The IRS will frequently negotiate to find an amount which is reasonable for all parties. An OIC will only be accepted if the IRS believes the debt is not collectible, the amount of debt assessed may be incorrect or collection of the debt would cause an unreasonable hardship for the Illinois taxpayer.

Offer in Compromise can be complicated and time consuming. The IRS will request detailed information about the Illinois taxpayer’s financial records and if the OIC is denied the IRS can use these records to continue debt collection. Penalties and interest will continue to accrue while the IRS is considering the OIC agreement. All Illinois taxpayers who are considering an OIC should contact a tax professional to help determine if it is the best option for them.

Qualifying for Offer in Compromise in Illinois

The IRS does not accept all OIC applications. Currently, the denial rate is approximately 80% for first time offers. More are accepted after negotiations or on appeal. Not all Illinois taxpayers will be approved for an Offer in Compromise. Offers will be accepted if they meet the following conditions:

Doubt as to Liability - If an Illinois taxpayer has doubts as to the amount of tax debt they owe due to an error in calculation or if additional financial data may prove the calculated amount is inaccurate, they may be offered an Offer in Compromise. The IRS does not frequently use this condition.

Doubt as to Collectibility -  Under this condition the amount of tax debt owed by the Illinois taxpayer is not in question, only the ability of the IRS to collect the debt either now or in the future.

Effective Tax Administration- Certain Illinois taxpayers will be unable to pay their IRS debt. If paying the debt will cause an inequitable or unfair hardship for the taxpayer, the IRS may be willing to accept an OIC. Taxpayers who are elderly or mentally or physically disabled most frequently meet this condition.

Rejection of Offer in Compromise in Illinois

The IRS frequently denies Offer in Compromise offers, but they do generally allow for negotiations. The IRS has the sole authority to accept and reject offers but they realize settling debt may allow a taxpayer to meet their future tax liabilities. If the IRS chooses not to accept an offer or not to negotiate, Illinois taxpayers will not have legal recourse against them.

The IRS is required to send written notification to Illinois taxpayers if their OIC is rejected. The letter should detail the reasons the OIC offer was declined. In most cases, the IRS considers the offer to low. The IRS should be able to provide a reasonable counter offer.

Appealing an Offer in Compromise in Illinois

Offer in Compromise negotiations can sometimes be done by contacting the IRS administrator who first examined your OIC offer. If the IRS administrator is not able or is unwilling to negotiate an offer more formal appeals can be made.

Formal OIC appeals must be made in writing to the IRS within 30 days from the date of the OIC denial letter. If the deadline expires or if a taxpayer’s financial information has changed substantially, new Offer in Compromise forms must be sent to the IRS. All Offer in Compromise information which is not provided to the Illinois taxpayer can be requested under the Freedom of Information Act.

Completing an Offer in Compromise

All the following tasks must be completed by the Illinois taxpayer for an Offer in Compromise:

• Illinois taxpayers must complete all Offer in Compromise forms and send them to the IRS.
• Financial data must be submitted to the IRS in a timely fashion. Financial information may include: Illinois taxpayer’s pay stubs, banking and vehicle information.
• Illinois taxpayers must file tax returns on or before the tax deadline for the next 5 years.
• All self-employed Illinois taxpayers must pay their federal tax estimates and file their federal tax returns every quarter.
• All tax payments (except the amount outlined in the OIC) must be paid for the next 5 years.
• Illinois taxpayers must pay the amount outlined in the OIC.
• All federal refunds will be applied to the Illinois taxpayer’s tax debt before the OIC offer is accepted.
• The IRS will apply any refund to the Illinois taxpayer’s federal tax debt for the calendar year that the OIC is approved.

Failure to meet all the previous OIC requirements can give the IRS the legal authority to cancel the OIC agreement and reinstate all federal tax debt.

Offer in Compromise Forms

1. IRS Form 656- Offer in Compromise. Illinois taxpayers must submit IRS Form 656 to the Internal Revenue Service to provide financial information about their ability to pay their tax debt.
2. IRS Form 443 A- Collection Information Statement for Wage Earners and Self-Employed Individuals. Form 443-A provides information to the IRS about the ability of the Illinois taxpayer to pay their debt.
3. IRS Form 443-B- Collection Information Statement for Businesses. Form 433-B provides information to the Internal Revenue Service about the Illinois’s taxpayers business. Only submit this form if the business debt is included in the Offer in Compromise agreement.
4. IRS Form 656-A- Income Certification for Offer in Compromise Application Fee and Payment. Illinois taxpayers should submit this form if they are requesting an Offer in Compromise fee waiver.

Florida taxpayers who file an Offer in Compromise are offering to pay the Internal Revenue service less than the full amount of tax debt they owe. The Internal Revenue Service has sole discretion to accept less than the full payment for the tax debt and will do so if they believe it is unlikely the debt will ever be collected or if there is doubt as to the taxpayer’s liability for the debt.

An Offer in Compromise is a legal alternative for the Internal Revenue service to avoid declaring tax debt as currently not collectible or accepting a protracted installment agreement. The Internal Revenue Service will often accept an Offer in Compromise to help the taxpayer pay as much debt as possible, for the least cost to the government in the shortest time frame possible.

The Internal Revenue Service currently accepts approximately 25% of the initial OIC offers. The IRS has the sole authority from the federal government to accept or refuse an OIC offer and Florida residents who have been denied will not have legal recourse against the IRS. Penalties and interest will continue to accumulate until the Offer in Compromise is accepted. An Offer in Compromise can be time consuming and expensive and if the IRS refuses an offer, they will have detailed information from the Florida taxpayer to continue their aggressive tax collection actions.

Florida residents who are considering an Offer in Compromise should contact a tax professional. The Internal Revenue Service offers a variety of tax settlement options for taxpayers and Offer in Compromise is not always the best solution to use to eliminate tax debt.

Qualifying for Offer in Compromise in Florida

A Florida taxpayer’s desire to have their tax bill reduced will not be enough to qualify for an Offer in Compromise. One of the following conditions must be met:

Doubt as to Collectibility - There must be some doubt as to the ability of the Internal Revenue Service to collect the IRS tax debt either now or in the immediate future.

Doubt as to Liability- This condition is unusual, but under certain conditions there may be a doubt as to whether a Florida taxpayer actually owes the IRS the taxes which they have been assessed.

Effective Tax Administration- Under certain exceptional circumstances Florida residents may face an economic hardship which would be inequitable or unfair if they paid their federal tax debt. If the IRS agrees, it may grant an Offer in Compromise. This condition is most frequently accepted for the elderly and handicapped.

Rejection of Offer in Compromise in Florida

Most Offer in Compromise offers are initially rejected. The Internal Revenue Service is required to send written notification to the taxpayer outlining the reason for the denial and if they considered the offer too low, they should identify what amount they would consider reasonable. Florida taxpayers should be able to review their Offer in Compromise information and if the IRS refuses, the information can be legally obtained under the Freedom of Information Act.

Offer in Compromise appeals have to be made with in 30 days from the date of the OIC denial letter. Offer in Compromise forms will not need to be resubmitted if the Florida’s taxpayer information has not drastically changed unless the date to appeal the OIC denial has passed. Tax professionals can provide legal advice for any Florida resident who is considering filing an Offer in Compromise application or if they need help with an OIC appeal.

Appealing an Offer in Compromise in Florida

Many Florida residents can begin the Offer in Compromise appeal’s process informally by discussing their offer with the IRS administrator who first denied their offer. The Internal Revenue Service may be willing to negotiate until an offer is reached which is suitable for the taxpayer and the government. Florida residents who are not successful utilizing the informal negotiation process can file a more formal written appeal to the Internal Revenue Service with in thirty-days of the Offer in Compromise denial letter.

Completing an Offer in Compromise

To file an Offer in Compromise the Florida taxpayer will have to complete the following tasks:

• Submit a series of forms and financial documents to the IRS. Documentation can include: pay stubs, bank records, and vehicle information.
• Florida taxpayers will have to file all IRS tax returns on or before the federal tax deadline for the next five years
• All self-employed Florida workers will have to make estimated tax payments and file all federal tax returns each quarter
• Florida taxpayers must pay all IRS tax payments (excluding the amount outlined in the Offer in Compromise offer) for the next five years
• Agree to pay the amount outlined in the Offer in Compromise
• Agree to let the IRS keep all IRS tax refunds and apply them to your tax debt prior to submitting your OIC
• Agree that the IRS will apply any tax refund to your IRS back taxes for the calendar year that your OIC is approved

***Failure to fulfill the terms outlined in the Offer in Compromise Contract can give the IRS the ability to revoke the OIC and charge the taxpayer with the full amount of IRS debt.****

Offer in Compromise Forms

1. IRS Form 656- Offer in Compromise. IRS Form 656 provides financial information about the Florida taxpayer’s financial status and their ability to repay their IRS federal tax debt.
2. IRS Form 443 A- Collection Information Statement for Wage Earners and Self-Employed Individuals. Form 443-A provides additional financial information about the Florida taxpayer’s ability to pay their IRS tax debt to the Internal Revenue Service.
3. IRS Form 443-B- Collection Information Statement for Businesses. Form 433-B outlines financial information about the Florida taxpayer’s business. Florida residents are required to submit tax Form 433-B if they are including their business tax debt in their Offer in Compromise offer.
4. IRS Form 656-A- Income Certification for Offer in Compromise Application Fee and Payment. This form is required for any Florida taxpayer who is requesting the Offer in Compromise fee waiver.

Florida Tax Professionals

There are a variety of tax settlement options available for Florida taxpayers. A tax professional has the expertise to review a taxpayer’s financial situation and determine which plan will help the taxpayer eliminate tax debt as soon as possible for the least amount of money.

The difficult job market provides a great time to consider furthering your education, yet also a terrible time to experience wage garnishment due to delinquent student loan payments.

If federal loans helped you reach your college education goals, the U.S. Department of Education has every right to expect you will meet your agreement to pay off your loan. While it may feel like a financial burden to repay your student loan, missing an extended period of loan payments will only increase your economic hardships.

By becoming delinquent on your federal loan payments, the government has the right to require your employer to send a portion of your salary as compensation. They could also take you to court or apply your federal tax refund toward the loan payments you owe.

While these tactics may seem harsh, imagine how you would feel if your employer neglected to pay you for the work you performed. Your hard work deserves compensation, and the government’s loan deserves repayment as well.

As a borrower, do you know your rights? What amount of advance notice should you receive before wage garnishment begins? What are your opportunities to object in a court hearing? How can you provide proof of a financial hardship which should prevent the wage garnishment?

An attorney familiar with both state and federal garnishment regulations can advise you in your options and help you renegotiate student loan payments that are advantageous to both parties. Garnishment is the last option that both you and the government want to take.

When you need objective counsel regarding repayment of your student loans, turn to an attorney who is educated in both state and federal wage regulations.