Offer In Compromise Success Stories

BJ Lynch
Expert Contributor
Last Updated:
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  • Though an Offer in Compromise (OIC) can be a complicated process to navigate, it is possible to succeed in having the Internal Revenue Service (IRS) accept your OIC.
  • Set yourself up for success from the start by using Solvable to connect with companies that are ready to give you immediate assistance in filing an OIC
  • Make it your top priority to be fully transparent and patient when dealing with the IRS.

When dealing with the IRS, you shouldn’t have to go it alone, but finding a company that can help you with your tax issues can be a daunting task. Here at Solvable, we have already vetted many companies capable of handling the financial problems you may be facing.

We have full confidence that our services will help you choose a company dedicated to finding solutions that fit with your circumstances. Negotiating with the IRS is difficult, but success can be achieved by gaining knowledge about your situation and by obtaining the right guidance.

Offer in Compromise and the IRS

Tax troubles can be intimidating, especially if you are facing those troubles alone. When you find yourself in a situation that requires you to apply for an OIC, you should take the following steps:

  • Gather all the information available to you concerning your current circumstances with the IRS.
  • Actively seek out help from a tax debt relief company that is experienced in dealing with the IRS.
  • Remain positive, practice patience, and uphold a level of transparency throughout the OIC process.

The IRS has guidelines it will follow when examining your OIC. Understanding these guidelines will further improve your chances that the IRS will accept and process your OIC. These IRS guidelines are as follows:

  • Any income level can qualify for an OIC.
  • Living expense guidelines are set and must be upheld.
  • With only 10 years to collect the debt owed to them, the IRS will determine your cash flow by calculating your earnings minus your monthly living expenses. Its goal is to estimate how much it can reasonably expect to collect from you within 10 years.

Allowable Expenses Considered During an OIC

IRS allowances for expenses are as follows. Keep in mind that the amounts shown are estimates and may vary by location:

Offer In Compromise Success Stories
  • $1,523/month allowed for the cost of living for a family of four
  • $1,942/month allowed for housing for a family of four
  • $295/month allowed in auto operating expenses, including gas, maintenance, and insurance
  • $517/month allowed for vehicle payments
  • $60/month allowed in medical costs per member of a household

Other allowable expenses include the following:

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  • Health insurance
  • Life insurance
  • Childcare/daycare
  • A percentage of payments being made on state or local tax debts
  • Child support
  • Alimony
  • Student Loans

The following expenses are not allowed in an OIC:

  • Amounts that are over the aforementioned standards
  • Credit card payments
  • Private school tuition
  • College expenses for dependents
  • Charitable contributions

When an OIC May Not Be Advisable

IRS guidelines are strictly maintained but can sometimes be negotiated for special circumstances. The amount of income you receive is not as substantial as how that income is allocated, and this can work against you when trying to pay a debt back to the IRS.

Even after you have a reasonable understanding of the OIC guidelines that the IRS follows, it might be best not to file for an OIC, depending on your circumstances. For instance, filing for an OIC may not be a good option in the following situations:

  • You have old liabilities, and filing bankruptcy is a real possibility.
  • You haven’t been in compliance with the tax code and quite possibly won’t be for the foreseeable future.
  • You have filed OICs previously, and they were not accepted.
  • You could take advantage of the Statute of Limitations in such a way as to only pay monthly installments toward your debt to the IRS, letting the collection period run out without paying the total amount owed.

Offer in Compromise Success Stories

When endeavoring to accomplish anything in life, it helps to see success stories from others who have gone through the same thing. This applies to experiences with the IRS as well; seeing that others have faced this challenging circumstance and made it through can inspire us to persevere. Several companies post Offer in Comprise success stories on their respective websites.

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Here are a few examples of OIC success stories where the IRS accepted the taxpayer’s OIC:

  • $35,043 OIC accepted on a $150,000 balance
  • $12,616 OIC accepted on a $180,000 balance
  • $5,183 OIC accepted on an $18,680 balance
  • $3,000/month on a $360,000 balance, with allowed expenses

The people these numbers represent were just a few of those who have had success with an OIC. Each of these cases is different in its details, but all ended with the IRS accepting an OIC. Also, keep in mind that these individuals enlisted the help of professionals.

See More >> How One Woman Crushed $300,000+ of Student Loan & Mortgage Debt

Other examples of the IRS accepting OICs include the following:

  • $121,000 OIC accepted on a $370,000 balance, achieved after an appeal
  • $1,320 OIC accepted on a $28,000 balance where low monthly payments were allowed
  • $17,000 OIC accepted on a $240,000 balance, achieved after an appeal

Making an Informed Decision

The best way to deal with the IRS is to avoid having an issue to begin with, but life happens, and we all have the potential to make costly mistakes with our finances. You may find that, in some cases, you can handle this type of trouble on your own, but we strongly recommend that you seek professional assistance when resolving problems with the IRS. Most companies specializing in this field offer a free consultation, so you have nothing to lose other than a little time to discuss your IRS troubles and possible solutions.

Getting an OIC accepted comes with lots of hard work and determination both on your part and from any professional help you may have enlisted. Don’t lose heart; Solvable has enabled many success stories through our database of experienced tax professionals. Know that success is possible.

 

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BJ Lynch
Expert Contributor
Last Updated: