If you owe significant back taxes and are unable to pay the full balance, you may have heard about the IRS Offer in Compromise program. An Offer in Compromise, commonly referred to as an “OIC,” is a tax resolution option that may allow certain taxpayers to settle their IRS tax debt for less than the total amount owed if they qualify under IRS guidelines.

At Z Tax & Accounting, we help individuals and businesses in Irving, Dallas, Fort Worth, Plano, Arlington, throughout the DFW Metroplex, and nationwide evaluate whether an Offer in Compromise may be appropriate based on their financial circumstances.

Not every taxpayer qualifies for an Offer in Compromise, and the IRS carefully reviews each application based upon income, assets, expenses, and overall ability to pay.

What Is an IRS Offer in Compromise?

An Offer in Compromise is a formal request asking the IRS to accept less than the full amount of tax owed in order to resolve the tax liability.

The IRS generally evaluates:

• Current income

• Monthly living expenses

• Equity in assets

• Bank accounts

• Investments

• Business interests

• Future ability to pay

• Filing compliance

The IRS will typically approve an Offer in Compromise only when it believes the taxpayer cannot reasonably pay the full balance within the allowable collection period.

Types of Offer in Compromise Cases

The IRS may consider Offers in Compromise based on:

• Doubt as to Collectibility

• Doubt as to Liability

• Effective Tax Administration in limited circumstances

Most OIC applications involve financial hardship and inability to fully pay the tax liability.

Common Reasons Taxpayers Owe Large Tax Balances

Many taxpayers accumulate IRS debt due to:

• Self-employment income

• Business losses

• Payroll tax issues

• Unfiled tax returns

• Divorce or medical hardship

• Cryptocurrency or investment gains

• International tax issues

• Economic hardship

• Unexpected IRS adjustments

Every taxpayer’s situation is different, and an Offer in Compromise is only one of several possible IRS resolution options.

Important OIC Qualification Requirements

Before the IRS will generally consider an Offer in Compromise:

• Required tax returns usually must be filed

• Current tax compliance must generally be maintained

• Estimated tax payments may need to be current

• Payroll tax deposits for businesses may need to be current

The IRS also reviews:

• Financial statements

• Income and expenses

• Assets and liabilities

• Supporting documentation

Offer in Compromise Does Not Guarantee Approval

Many advertisements incorrectly suggest taxpayers can easily settle IRS debt for “pennies on the dollar.” In reality, the IRS carefully evaluates each case, and not all taxpayers qualify.

In some situations, other IRS resolution options may be more appropriate, including:

• Installment agreements

• Partial payment installment agreements

• Currently Not Collectible status

• Penalty relief requests

• Filing missing returns

At Z Tax & Accounting, we help taxpayers review their financial circumstances and evaluate potential resolution strategies.

Business & Payroll Tax OIC Matters

Business owners facing payroll tax liabilities or business tax debt may also consider:

• Payroll tax resolution

• Business installment agreements

• Collection alternatives

• Compliance restoration

Payroll tax matters can involve additional IRS considerations and should generally be addressed carefully.

International Tax & Offshore Issues

Taxpayers with international tax matters may also face:

• Foreign reporting penalties

• Offshore compliance issues

• FBAR matters

• Form 8938 issues

• International information return penalties

Our office also assists taxpayers with international tax compliance and offshore reporting matters.

IRS Representation Services

Ahsan Bashir is admitted to practice before the IRS and assists taxpayers with:

• Offer in Compromise evaluations

• IRS correspondence

• Collection matters

• Financial statement preparation

• IRS notices

• Tax resolution strategies

• Compliance issues

Our office works with taxpayers to review available options and determine the most appropriate path toward resolution based on their individual circumstances.

Serving DFW Metroplex & Nationwide

Our office proudly assists taxpayers throughout:

• Irving

• Dallas

• Fort Worth

• Plano

• Arlington

• Richardson

• Coppell

• Carrollton

• Euless

• Bedford

• Grapevine

• Grand Prairie

• Las Colinas

• Farmers Branch

We also provide secure virtual services for taxpayers nationwide.

Schedule a Consultation

If you owe substantial back taxes and would like to evaluate whether an Offer in Compromise or another IRS resolution option may be appropriate, our office can help review your situation and discuss available options.

Contact Z Tax & Accounting today to schedule a consultation regarding your IRS tax matter.

Related IRS Tax Resolution Services

• IRS Installment Agreements & Payment Plans

• IRS Penalty Abatement & Penalty Relief

• IRS Wage Garnishment & Bank Levy Help

• Unfiled Tax Returns & Late Tax Filing Help

• IRS Notices & Tax Letter Help