My Offer in Compromise was increased by the IRS; Why?
Rejected OIC- Failure to disclose assets
I received an email from a nice lady asking me why her Offer in Compromise was increased. I gave her a call and asked her to read me the rejection letter. The IRS had increased the offer because she failed to disclose a rather large boat. I asked her two questions 1) Did she have a loan for the boat that she is making payments on? 2) Is the trailer for the boat registered in your name? To both she answered YES. She said she forgot to disclose the boat and, as it turns out, she made some other mistakes in her favor. I told her that the IRS caught this by looking at her credit report and Department of Motor Vehicle records.
The following are the most common reasons for denial of an Offer in Compromise:
- Failure to maintain compliance by making estimated payments
- Missing information
- Failure to disclose assets
- Failure to maintain compliance due to outstanding returns
- Active Bankruptcy
- Frivolous submissions
- Failure to pay the processing fee unless below a specific income level
- Failure to maintain compliance in the 5-year look-forward period
- Failure to make the non-refundable payment with the application
- Default on a previously accepted Offer
- Do not qualify for an Offer- Considered Full Pay
- Living expenses are considered excessive
- Dissipation of assets
This is item 3, Failure to disclose assets
Should you get help?
I have seen many people try to prepare their own OIC and fail because they do not fully understand the art of dealing with the IRS. Yes, you can submit an Offer in Compromise yourself but if you are trying to considerably reduce your debt, I recommend you rethink your position.
An “accepted” OIC is not the same as a “successful” OIC.
There is more to it. Sure, the average taxpayer can fill out the forms and after spending hours reading and rereading the instructions provide the substantiation needed for an application to be accepted. How do you measure success? To me, success is measured with an approval on the LOWEST DOLLAR AMOUNT the IRS will accept.
If you feel that you may be in over your head, or just want to get a second opinion, let’s set up a short call. To avoid the back and forth emails and phone tag, I have included a link to my Calendar https://calendly.com/taxman/tax-problem-resolution-initial-consultation. Let’s set up a 30 min. phone conference to get to know each other. The phone number to call is 855-829-5877 and my extension is 203.