Taxpayers filed 58,000 offers in compromise last year. 38% of all those offers in compromise filed were accepted by the Internal Revenue Service. The average settlement on a dollar was $.14.
The best advice I can give you is use a professional tax firm was filed multiple offers in compromise to prepare and negotiate your offer in compromise.
There are certain formulas that IRS use to accept an offer in compromise.
Knowing these formulas are great help to the success taxpayers getting this tax debt or tax burdens off their back.
IRS can only settle a case by the use of the offer in compromise formula.
Being a former IRS agent and teaching instructor I not only worked and settled cases with the IRS but I taught the offer in compromise program to revenue officers and former IRS agents.
Because of the number of marketing and Internet companies aggressively seeking dollars from consumers there are many false claims and fraudulent advertising driving people to file an offer compromise when in fact they do not qualify for the offer in compromise program.
The Offer in Compromise Pre- Qualifier Tool
The Internal Revenue Service couple years ago launched a pre-qualifier tool to help taxpayers navigate their way themselves to find out whether they qualify for the offer in compromise program.
You can find that pre-qualifier tool for the offer in compromise on our website.
You should understand that there is a lot of skewing and a lot of internal maneuvers to make within that formula to make sure your offer in compromise can get accepted if you are in fact a qualified candidate/taxpayer for offer in compromise help.
When the Internal Revenue Service accepts the offer in compromise  a taxpayer who has a federal tax lien filed against their name will get that removed as soon as they fulfill the contract and terms of the offer in compromise.
You can call us today for free initial tax assessment and we can walk through the program and find out if you are a qualified candidate to settle your case and we can give you help with your offer in compromise.
 
Acceptance Formulas Revenue Service
IRS is interested in only things assets and income.
IRS will want the total liquidation values of all your assets and the IRS will value your income based on the monthly standards.
IRS will add your total value of your income and multiple by 12 the value of income over and above the necessary living expenses.
This is a rock solid formula.
 
 The IRS Offer in Compromise General Information
The Offer in comprise will or can settle the taxpayer’s tax liabilities for less than the full amount owed.
It is important to remember that not all taxpayers are qualified candidates for the offer in compromise. You should check with the true tax professional to make sure you qualify for this program.
 
Make sure your are Eligible
In order to be eligible for an OIC, the taxpayer must have:

• filed all tax returns,
• made all required estimated tax payments for the current year, and
• made all required federal tax deposits for the current quarter if the taxpayer is a business owner with employees.
• In most cases, the IRS will not accept an OIC unless the amount offered by the taxpayer is equal to or greater than the reasonable collection potential (the RCP). The RCP is how the IRS measures the taxpayer’s ability to pay.
• The RCP includes the value that can be realized from the taxpayer’s assets, such as real property, automobiles, bank accounts, and other property. In addition to property, the RCP also includes anticipated future income, less certain amounts allowed for basic living expenses.

 
The IRS may accept an OIC based on three grounds.

• 1. Acceptance is permitted if there is doubt as to liability. This ground is only met when genuine doubt exists under applicable law that the IRS has correctly determined the amount owed.
• 2. Acceptance is permitted if there is doubt that the amount owed is fully collectible. This means that doubt as to collectibility exists in any case where the taxpayer’s assets and income are less than the full amount of the tax liability.
• 3. Acceptance is permitted based on effective tax administration. An offer may be accepted based on effective tax administration when there is no doubt that the tax is legally owed and that the full amount owed can be collected, but requiring payment in full would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances.

 
OIC – Effective Tax Administration
When submitting an OIC based on doubt as to collectibility or based on effective tax administration taxpayers must use the most current version of  form 656 (PDF), Offer in Compromise, and also submit form 433 oic (PDF), Collection Information Statement for Wage Earners and Self-Employed Individuals, and/or form 433B oic (PDF), Collection Information Statement for Businesses.
 
OIC – Doubt as to liability
A taxpayer submitting an OIC based on doubt as to liability must file a form 656-l (PDF), Offer in Compromise (Doubt as to Liability), instead of Form 656 and Form 433-A (OIC) and/or Form 433-B (OIC).
 
Application Fees for the Offer in Compromise
In general, a taxpayer must submit a $150 application fee with the Form 656. Do not combine this fee with any other tax payments.
There are, however, two exceptions to this requirement.

• First, no application fee is required if the OIC is based on doubt as to liability.
• Second, the fee is not required if the taxpayer is an individual (not a corporation, partnership, or other entity) who qualifies for the low-income exception. This exception applies if the taxpayer’s total monthly income falls at or below 250 percent of the poverty guidelines published by the Department of Health and Human Services.
• Section 4 of Form 656 contains the Low Income Certification guidelines to assist taxpayers in determining whether they qualify for the low-income exception. A taxpayer who claims the low-income exception must complete section 4 of Form 656.

 
Making a Decision of How to Pay the Offer in Compromise
 
Taxpayers may choose to pay the offer amount in a:

• lump sum or
• in installment payments.

 
A “lump sum offer” is defined as an offer payable in 5 or fewer installments and within 24 months after the offer is accepted.
If a taxpayer submits a lump sum offer, the taxpayer must include with the Form 656 a nonrefundable payment equal to 20 percent of the offer amount.
This payment is required in addition to the $150 application fee. The 20 percent amount is called “nonrefundable” because it cannot be returned to the taxpayer even if the offer is rejected or returned to the taxpayer without acceptance.
The 20 percent amount will be applied to the taxpayer’s tax liability.
The taxpayer has a right to specify the particular tax liability to which the IRS will apply the 20 percent amount.
 
The offer is called a “periodic payment offer” under the tax law if it is payable in 6 or more monthly installments and within 24 months after the offer is accepted.
When submitting a periodic payment offer, the taxpayer must include the first proposed installment payment along with the Form 656.
This payment is required in addition to the $150 application fee.
This amount is nonrefundable, just like the 20 percent payment required for a lump sum offer.
Also, while the IRS is evaluating a periodic payment offer, the taxpayer must continue to make the installment payments provided for under the terms of the offer.
These amounts are also nonrefundable.
These amounts are applied to the tax liabilities and the taxpayer has a right to specify the particular tax liabilities to which the periodic payments will be applied.
The statutory time within which the IRS may engage in collection activities is suspended during the period that the OIC is under consideration and is further suspended if the OIC is rejected by the IRS and where the taxpayer appeals the rejection to the IRS Office of Appeals within 30 days from the date of the notice of rejection.
If the IRS accepts the taxpayer’s offer, the IRS expects that the taxpayer will have no further delinquencies and will fully comply with the tax laws.
If the taxpayer does not abide by all the terms and conditions of the OIC, the IRS may determine that the OIC is in default.
For doubt as to collectibility and effective tax administration OICs, the terms and conditions include a requirement that the taxpayer timely file all tax returns and timely pay all taxes for 5 years from the date of acceptance of the OIC. Offers in compromise filed for  effective tax administration are hard to get through. I’ll imagine the last five years there are no more than five offers in compromise accepted under effective tax administration.
When an OIC is declared to be in default, the agreement is no longer in effect and the IRS may then collect the amounts originally owed, plus interest and penalties.
Additionally, any refunds due within the calendar year in which the offer is accepted will be applied to the tax debt.
If the IRS rejects your offer you can Appeal for File another OIC
If the IRS rejects an OIC, then the taxpayer will be notified by mail. The letter will explain the reason that the IRS rejected the offer and will provide detailed instructions on how the taxpayer may appeal the decision to the IRS Office of Appeals. If you think you have a valid appeal fight for your offer.
The appeal must be made within 30 days from the date of the letter. In some cases, an OIC is returned to the taxpayer, rather than rejected, because the taxpayer has not submitted necessary information, has filed for bankruptcy, has failed to include a required application fee or nonrefundable payment with the offer, or has failed to file tax returns or pay current tax liabilities while the offer is under consideration.
A return is different from a rejection because there is no right to appeal the IRS’s decision to return the offer. Believe it or not there is an extraordinarily high number of offers in compromise returned because the taxpayer simply do not know how to complete the form.
There are no limitations to the filing of offers in compromise.
You could file as many offers in compromise is you wish. The highest acceptance chance that you will possibly have is using tax professional firm who knows the offer in compromise program inside out.