Bookkeeping & Accounting of Florida Inc.

LET US HANDLE YOUR TAXES

CALL US TODAY!904-333-1041

OIC acceptance is rare. Here's why.

April 28, 2014 | by Jim Buttonow, CPA/CITP

Television and radio are filled with ads claiming that taxpayers can settle their tax balances owed to the IRS. This settlement program is known as the IRS offer in compromise (OIC). Clients who can’t pay their taxes may inquire about this overhyped settlement option; however, according to IRS statistics, it is highly unlikely that most taxpayers who have outstanding balances will have an OIC accepted.

The Government Accountability Office reported that in 2010 more than 16 million taxpayers owed taxes to the IRS, and these numbers have continued to increase. In 2013, despite the millions of taxpayers with debt, the IRS approved only 31,000 OIC applications. In contrast, the IRS had almost 4 million installment agreements in effect in 2013 for taxpayers to repay their balances.  

OIC acceptance is rare for two main reasons: Either the taxpayer does not qualify for an OIC or, if the taxpayer does qualify, he or she can’t pay the offer amount.

uxicached