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What is an Offer in Compromise?

What is an Offer in Compromise?

Some people may ignore their taxes because they know they cannot afford their tax liability. However, failing to file can result in serious penalties or even criminal charges. Always remember there are options for those you cannot pay their full past-due tax bill in full all at once. One option is to seek an offer in compromise (OIC). There is no guarantee that your OIC will be granted, however, and it always helps to have the assistance of an experienced tax lawyer in San Francisco so you can obtain the help you need.

An offer in compromise is a proposed plan that you can make to the Internal Revenue Service (IRS) when you cannot pay your full tax bill. When accepted, an OIC allows you to pay a lump sum that is less than you owe. The IRS will not grant such a settlement to just anyone, however.

You may qualify for an OIC if you cite one or more of the following reasons:

  • There is a genuine doubt or dispute regarding the amount of your tax liability.
  • Your assets and income are less than your tax bill, so it may not even be possible for the IRS to collect on the debt.
  • Payment of your tax liability would create financial hardship for you or would otherwise be unfair in your specific circumstances.

While offers in compromise can help many taxpayers, the IRS grants less than half of proposals. This is in part because applicants do not prepare a persuasive proposal from the start. 

Contact Our Tax Lawyers in San Francisco for Additional Information

If you owe back taxes that you cannot afford, the San Francisco tax attorneys at Diosdi Ching & Liu, LLP may be able to help. Never ignore past due tax debts – instead, call 415.318.3990 or contact us online for a consultation today.