An Offer in Compromise (OIC) allows you to settle your tax debt for less than the full amount you owe. If you're struggling with tax debt in Victorville or Apple Valley, CA, an OIC might be the solution you need.
🚨 Owe Back Taxes? You Should Really Talk to Me
An Offer in Compromise could allow you to settle your tax debt for pennies on the dollar. But the process is complex, and most applications are rejected. We know how to prepare a successful OIC application.
Under an audit? Definitely talk to me. Audit outcomes can create tax debt. An OIC might be the solution if you can't pay the full amount.
Call (760) 249-7680 for OIC HelpWhat is an Offer in Compromise?
An Offer in Compromise is an agreement between you and the IRS to settle your tax debt for less than the full amount owed. The IRS accepts OICs when:
- Doubt as to Collectibility - You can't pay the full amount
- Doubt as to Liability - There's genuine dispute about the amount owed
- Effective Tax Administration - Full payment would cause economic hardship
Who Qualifies for an OIC?
The IRS considers several factors:
Financial Situation
- Your ability to pay
- Your income and expenses
- Your assets and equity
- Your future earning potential
Compliance Requirements
- All required tax returns must be filed
- Estimated tax payments must be current
- You must be compliant with payroll taxes (if applicable)
⚠️ Important Note
Most OIC applications are rejected because they're not properly prepared. The IRS has strict requirements, and small mistakes can lead to rejection. Professional help significantly improves your chances of acceptance.
How the IRS Calculates Your Offer
The IRS uses a formula to determine the minimum acceptable offer:
Reasonable Collection Potential (RCP)
RCP = (Net Realizable Equity in Assets) + (Future Income)
Assets
The IRS calculates the quick sale value of your assets (typically 80% of fair market value) minus any liens.
Future Income
The IRS calculates your excess monthly income (income minus allowable expenses) multiplied by a factor (typically 12-24 months).
Allowable Expenses
The IRS allows certain expenses when calculating your ability to pay:
- Housing and utilities
- Food and clothing
- Transportation
- Health care
- Taxes
- Court-ordered payments
The IRS uses National Standards and Local Standards to determine allowable amounts. These are different from your actual expenses.
The OIC Process
Step 1: Eligibility Check
We determine if you're eligible and if an OIC makes sense for your situation.
Step 2: Application Preparation
We prepare Form 433-A (individuals) or Form 433-B (businesses) with all required financial documentation.
Step 3: Offer Calculation
We calculate the appropriate offer amount based on IRS formulas and your financial situation.
Step 4: Submission
We submit Form 656 (Offer in Compromise) along with Form 433 and required documentation.
Step 5: Review Process
The IRS reviews your offer, which typically takes 6-12 months. We handle all communication.
Step 6: Decision
The IRS accepts, rejects, or returns your offer. We negotiate and appeal if necessary.
OIC Payment Options
If your OIC is accepted, you can pay:
- Lump Sum Cash - Pay within 5 months (20% down with application)
- Short-Term Periodic - Pay within 24 months (no down payment required)
What Happens After Acceptance?
If your OIC is accepted:
- You must comply with all tax obligations for 5 years
- Any refunds for the year of acceptance go to the IRS
- Tax liens are released after payment
- Your tax debt is considered settled
Common OIC Mistakes
Avoid these costly mistakes:
- Submitting an offer that's too low
- Not providing complete financial information
- Failing to meet compliance requirements
- Not understanding IRS standards
- Giving up too easily if initially rejected
Why Most OICs Are Rejected
Statistics show that most OIC applications are rejected because:
- Incomplete applications
- Offers that are too low
- Failure to meet compliance requirements
- Inadequate financial documentation
- Not understanding IRS formulas
Why You Need Professional Help
OIC applications are complex and require:
- Understanding of IRS formulas and standards
- Proper financial documentation
- Accurate calculation of offer amount
- Negotiation skills
- Experience with the process
Professional representation dramatically improves your chances of acceptance.
Alternatives to OIC
An OIC isn't always the best solution. We also explore:
- Installment agreements
- Currently Not Collectible status
- Penalty abatement
- Partial payment installment agreements
Explore Your Options
If you owe back taxes, you should really talk to me. An Offer in Compromise might be the solution, but we'll explore all options to find what works best for your situation.
We serve Victorville, Apple Valley, Hesperia, and all High Desert communities. Our experienced team has successfully negotiated OICs for many taxpayers.
Call (760) 249-7680 for Free ConsultationFrequently Asked Questions
How much will the IRS accept?
The IRS will accept the minimum amount equal to your Reasonable Collection Potential. We calculate this based on your assets and future income.
How long does the process take?
OIC review typically takes 6-12 months, sometimes longer. During this time, collection actions are typically suspended.
Can I make payments on an OIC?
Yes, you can pay your accepted offer in installments, but the terms depend on which payment option you choose.
What if my OIC is rejected?
You can appeal the rejection or explore other options like installment agreements or Currently Not Collectible status.
Get Started Today
If you're struggling with tax debt in Victorville or Apple Valley, an Offer in Compromise might be your solution. Contact Tax Help Guy for a free consultation to see if you qualify.
Contact Information:
Apple Valley Office: 18188 Symeron Road, Apple Valley, CA 92307
Phone: (760) 249-7680
Serving Victorville, Apple Valley, and all High Desert communities