Top Ten Tips for a Successful Offer in Compromise

Even if you qualify for an Offer in Compromise, there are still multiple things you can do to increase your chances of having your Offer in Compromise accepted.  Here is a list of our top ten items to give you the best chance of having your IRS Offer in Compromise accepted.

  1. Organize, Organize, Organize. The Offer Specialist assigned to your Offer also has many other cases to go through.  They do not want to spend a ton of time digging through irrelevant and unorganized information.  Your goal should be to make it as simple as possible for the IRS to find support for each expense on your Offer in Compromise.  This will increase your chance of having the IRS agent verify and allow your claimed expenses.  Feel free to write on the documents or highlight important items on your documents.
  2. Attach All Supporting Documentation. In order for the IRS to allow an item on your Offer in Compromise, they will require documentation that supports the numbers listed on your Offer.  Make sure that you include support for all claimed items.  Some common types of support include: three months of all bank statements, utility bills, mortgage statements, car loan statements, titles, proof of health and life insurance, and income statements.  The more information that you can provide with your initial Offer submission, the easier it will be for the Offer Specialist to review and evaluate your Offer.
  3. Sign All Forms and Attach Payment. Make sure that you sign and date all of the Offer forms.  Both form 656 and form 433-A (OIC) require signatures.  If you are filing a joint Offer, both parties will need to sign the Offers.  Also, unless you qualify for the low-income waiver, you will need to attach a check for the down payment and filing fee.  Make sure that you have funds in your bank account to cover these checks.  If the Offer is not signed or if there are not sufficient funds to cover the checks, the Offer will be returned.
  4. Be Honest and Accurate. Make sure that you fill out your Offer completely and accurately.  If you are not sure if something needs to be included, put it on your Offer in Compromise and explain it to your Offer Specialist.  The IRS will do a thorough review of your income, expenses, and assets.  If they find items that you did not include or tried to hide, it will ruin your credibility.  It is also a federal offense to send false information to the IRS.
  5. Watch Your Mail and Phone. Once your Offer has been assigned to an Offer Specialist, they will contact you by either phone, mail, or both.  They will likely want to discuss information that you have provided and may request additional information.  If the IRS does not receive a response to their initial contact, they may return your Offer without appeal rights.  Make sure that you watch for IRS contact and update any changes in your contact information to the IRS.
  6. Be Ready to Appeal. Even if you have a good Offer, it may not be accepted by the Offer Specialist.  Some specialists just never seem to accept Offers.  Do not get discouraged if your Offer is denied.  You will have the option to appeal if your Offer is rejected.  This will give you an opportunity to have a new person evaluate your Offer and accept it.
  7. Timely Provide Any Additional Information Requested. If the Offer Specialist or the appeal’s agent requests additional information, make sure that you timely provide it.  An Offer in Compromise is very time sensitive and the IRS generally does not give long to provide additional information.  It is very important that you quickly gather and provide the requested information.  Also, as was stated above, make sure that your information is organized and easy to read.
  8. Pay Your Offer Amount By The Deadline. Once your Offer in Compromise is accepted, you will need to pay off the remaining amount of the Offer.  Depending on the type of Offer that you requested, you may have five months or 24 months to pay-off the remaining Offer amount.  Even if your Offer was accepted, if you do not meet the payment terms, it will be defaulted.  You do not want to spend the time and resources on getting an accepted Offer in Compromise only to have it default after it is done.  Therefore, make sure that you are aware of both the payment date and the remaining amount on the Offer.
  9. Provide Copies. Do not send the IRS your original documents.  For both the initial Offer in Compromise request and for any additional information that you send to the IRS, send clean, clear copies.  If you send your original documents, you will not get them back.  Also, make sure that you keep a copy of everything that you send to the IRS, including your initial Offer in Compromise forms.  When the IRS calls you to discuss your Offer, it will be very helpful to have your own copy to reference.  You will also want to have copies of everything sent with your original Offer in case you need to go to appeals.
  10. Correspond In Writing. Send everything to the IRS in writing.  If they verbally request information from you, request that they send you a written request with deadlines on it.  If they ask you questions, send a response back in writing.  The more of your information that you can document, the less chance there is for confusion or miscommunication.  Also, you will have something to reference later if there is an issue.

An Offer in Compromise is never guaranteed.  There are many factors that come in to play when preparing, filing, and negotiating an Offer in Compromise.  These tips are all things that can help your Offer be more successful.  However, they will not replace the experience and expertise of a qualified tax representative.  To find out if you qualify for an Offer in Compromise, contact our office for a consultation today.