In Ailing Economy, More Taxpayers Are Likely to Qualify For Offer in Compromise

Faced with overwhelming tax debt, more Americans than ever will be hoping to qualify for the IRS Offer in Compromise (OIC) program and save thousands of dollars in taxes, penalties and interest.

In 2007, approximately 46,000 offers were submitted to the IRS nationally and only 12,000 were accepted. This year, there will be more offers submitted this year, as well as a higher IRS acceptance rate due to the state of the economy.

While the OIC program can offer relief to Americans who have exhausted all financial resources available to them to pay their taxes, it also allows the government to collect a negotiated payment from distressed taxpayers now, which helps the IRS save on the administrative costs of going after people who simply don't have the money to pay their tax debt.

So the government can collect a negotiated payment from distressed taxpayers now and instead of wasting time and resources trying to draw blood from a rock.

To qualify for an OIC, taxpayers must prove to the IRS that they have exhausted all financial resources available to them to pay their taxes. For example, homeowners are typically declined for OIC settlements. But without home equity to fall back on, many distressed homeowners may now be able to negotiate a reduction of their tax debt.

However, taxpayers need to remember that that the OIC program is a privilege, not a right, like bankruptcy. And taxpayers should beware of tax resolution companies that guarantee specific results. Our  acceptance rate on offers we submit is nearly 5 times (approximately 90%) the national average. Why? Because we don't allow clients to retain us to submit frivolous OICs.

Companies need to be upfront and let clients know that not everyone can qualify for this type of help because the IRS has very strict guidelines governing eligibility. And taxpayers need to do their research and know what to look for when hiring an ethical and professional tax resolution company.

When the economy was strong, the IRS tightened the rules on the OIC program, but now things have changed and there are lots of people that deserve to take advantage of the program.

If you are in trouble with the IRS, our specialized staff of attorneys, CPAs, EAs and tax professionals can help. Visit the Tax Resolution Services web site  for a free tax relief consultation or call us at 866-477-7762.

Michael Rozbruch, one of the nation's leading tax experts, is a Certified Tax Resolution Specialist (CTRS), licensed CPA in the state of Maryland and the founder of Tax Resolution Services. He teams up with an expert staff of tax attorneys, CPAs, and tax relief professionals to help individuals and small businesses solve their IRS problems with tax liens, unfiled back taxes, offers in compromise, wage levies, tax relief, delinquent returns, tax debt installment plans, bankruptcy and protecting an innocent spouse from unfair tax burdens. Michael also shares valuable tax advice and information in his blog- Tax Resolution University