According to an article in
the July/August 2003 issue of the EAJournal,
Offers in Compromise are being sent
back in record numbers
The IRS met with tax professionals at its Centralized Offer in Compromise (COIC) facilities at the Brookhaven (New York) Campus on April 24, 2003. The COIC units in Brookhaven and Memphis work all cases involving wage earners except in complex cases. According to the IRS, 60-65% of all Offers are worked at the COIC units.
In the fiscal year ending September 30, 2002, over 64,000 cases were disposed of at Brookhaven and Memphis. Over 56,000 were either not processable or returned by the IRS. Of the remaining 7,900 cases, nearly 5,200 were rejected by the IRS or withdrawn by the taxpayer. Only 2,739 Offers were ultimately accepted. That means only 4.2% of all the Offers disposed of by the two COIC sites were accepted!
Of course, this brings up a very important question. Why are 96% of these Offers not accepted???
Our experience tells us that
there are a few probable reasons:
1)
A majority of the "not
processable" and returned Offers were likely prepared by taxpayers without
professional assistance;
2)
The
IRS is doing everything it can to not have to work Offers in the first place by
finding picayune reasons for declaring an Offer "not processable" or returning
it;
3) So-called "Offer mills" are submitting Offers that cannot possibly be accepted.
So, what is the best way to ensure that your Offer is processed and what gives you the best shot at acceptance? I could be very self-serving and simply advise you to hire eTaxes.com. But, instead let's talk about what is going to work best for you.
1) If you owe more than $10,000 or so, hire a LICENSED tax professional (EA, CPA or attorney);
2) Make certain that the tax professional you hire makes IRS representation a major part of his or her practice;
3) If you cannot speak to the LICENSED tax professional prior to signing a contract or paying money RUN as fast as you can;
4)
Don't sign a contract or pay a retainer until and unless you
have thoroughly discussed the matter with the LICENSED tax pro. It is
TAXES.COM's policy to give free consultations (by phone or e-mail) to anyone
with a tax problem. While other tax pros may not do that, be certain that they
have a complete understanding of your case and your financial status before
giving them money.
Here's the bottom line. Since it appears that the IRS will do anything in their
power to send back your Offer as quickly as possible; do your homework and hire
the best tax pro you can find and submit a good Offer with full documentation as
quickly as you can.
Please see these two pages for details on the
IRS
Offer in Compromise program and an
article eTaxes.com Founder and CEO
Steve Kassel, EA wrote on the Offer in Compromise program.