Dec 29, 2007

Your Tax Debt- The Offer in Compromise Series

In the next week, I will be posting a long series on the intricacies of the Offer in Compromise ("OIC"). I receive many calls each day from clients that want an OIC. Most clients believe that it is a mere offering of an amount and the IRS will accept, reject or counter offer without many facts. This could not farther from the truth.

The OIC is a detailed investigation by the IRS that should be completely investigated by a competent professional and the client PRIOR to submission. In an OIC investigation, the IRS will review your past, present and future financial data. They will look into all assets that you own and possibly assets that they think you should own (think of the possibilities that exist here!!). They will scrutinize your tax returns, your finances, your income potential, your living arrangements, your family's finances, and much more.

In the series to follow, I will give you some statistics on the OIC, the mechanics of the OIC, the types of OICs, what the IRS does in an OIC investigation, who should and should not file an OIC, and options other than an OIC.

Do not believe that the OIC is always the best option. It is the most publicized options and the one that says "settlement"- a buzz word that screams "free lunch." Remember, there is no such thing as a free lunch AND if it is too good to be true, it usually is not true.

There are many unscrupulous people that will talk you into an OIC. But IT MAY NOT BE THE BEST OPTION FOR YOU!! In fact, there are approximately 20 other options you should review before taking on the risk of filing for an OIC.

Do you feel comfortable that you know all the options??? Read on and see what is entailed in an Offer. But before you proceed, it is in your best interest to explore all options through a competent tax professional.

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