{"id":50,"date":"2021-02-24T15:46:58","date_gmt":"2021-02-24T15:46:58","guid":{"rendered":"https:\/\/sacramentotaxlawyers.com\/?page_id=50"},"modified":"2021-12-06T19:30:13","modified_gmt":"2021-12-06T19:30:13","slug":"faq","status":"publish","type":"page","link":"https:\/\/sacramentotaxlawyers.com\/home\/offer-in-compromise\/faq\/","title":{"rendered":"FAQs"},"content":{"rendered":"\n

Offer in Compromise FAQs<\/h1><\/p>\n\n\n\n

An offer in compromise is a popular tax resolution strategy, but it’s also one that’s frequently misunderstood. For instance, applicants can’t come up with an offer amount out of thin air; rather, it must align with the reasonable collection potential. Furthermore, there are some disadvantages<\/a> to filing an offer in compromise such as tolling statute of limitations for collection. This page contains offers in compromise FAQs<\/a> to help you better understand the OIC process and criteria. <\/p>\n\n\n\n

Sacramento tax relief attorney Jin Kim files offer in compromise applications with the Internal Revenue Service. To learn more about her offer in compromise service<\/a> and how she can help you for a flat fee, call her office at (916) 299-9913<\/strong> for a free consultation.<\/p><\/blockquote>\n\n\n\n

Can The IRS Reject My Offer In Compromise?<\/h2>\n\n\n\n

Yes, the IRS can reject your offer of compromise (OIC). When you submit an offer of compromise to the IRS, the case is assigned and reviewed. The IRS will consider several different factors in deciding what\u2019s the best course of action to take with your case. It\u2019s important to remember that an offer of compromise isn\u2019t the only option on the table. For example, if your reason for submitting an offer is that your business is suffering a temporary setback, then the IRS may instead suggest delaying payment rather than accepting your offer in compromise. In some instances, the IRS may also impose additional terms before your offer is accepted, such as making the dissolution of your business a requirement before accepting the offer.<\/p>\n\n\n\n

What Can I Do If The IRS Rejects My OIC?<\/h2>\n\n\n\n

There is always the remedy of appeal<\/a> if the IRS rejects your offer of compromise. If the IRS decides to reject your offer, you will be informed in writing that your offer is rejected. You will also be informed of the reasons why your offer was rejected. You will also find in your letter instructions detailing how to appeal the decision. Appeals are sent to and handled by the IRS Office of Appeals. If you want to appeal the decision, take note that you should file your appeal within thirty days from the date of the letter.<\/p>\n\n\n\n

What Does It Mean If The IRS Returns My Offer In Compromise?<\/h2>\n\n\n\n

If the IRS returns your offer, it doesn\u2019t necessarily mean that the offer has been rejected. The most probable reason is that you haven\u2019t submitted all the necessary files and forms along with your offer. If the IRS returns your offer in compromise, you can resend your offer to the IRS after complying with the lacking requirements.<\/p>\n\n\n\n

How Can I Ensure That The IRS Will Approve My Offer?<\/h2>\n\n\n\n

It\u2019s necessary to comply with all the requirements and fees to ensure the best chances of your offer being accepted. You shouldn\u2019t try to lowball the IRS when making an offer, either. The IRS keeps tabs on taxpayers’ ability to pay with the so-called Reasonable Collection Potential (RCP). The IRS calculates this by taking into consideration a taxpayer\u2019s assets. Assets may include future income. Through the RCP, the IRS can measure a taxpayer\u2019s ability to pay the tax liability. If your offer is lower than your RCP, the IRS will reject your offer, preferring instead to collect the entire amount owed.<\/p>\n\n\n\n

You should also be qualified<\/a> to submit an OIC; otherwise, the IRS will reject your offer. Being qualified means that you\u2019ve filed all tax returns, made the required federal tax deposits, and made the required estimated tax payments for the current year. Furthermore, you must have a basis for filing the offer in compromise, such as effective tax administration<\/a>, doubt as to liability, or the most popular – doubt as to collectibility.<\/p>\n\n\n\n

Is There An Application Fee?<\/h2>\n\n\n\n

Yes, there is an application fee if you submit an offer in compromise. The fee will be stated in Form 656<\/a>. There are two exceptions to the payment of the application fee:<\/p>\n\n\n\n