Offers in Compromise

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McFarlane Law, PLC
14500 N. Northsight Blvd, Suite 217
Scottsdale, AZ 85260

Phone: 480-991-0032
Fax: 480-483-6673

Helping Clients Reach Payment Arrangements With the IRS and the ADOR

If you owe a tax debt that you cannot afford to pay, you may be able to reduce your overall tax liability by making an offer in compromise. Both the IRS and the ADOR provide an Offer in Compromise (OIC) Program that works to accept less than full payment for what you owe in taxes, interest, and penalties. These programs are based on an analysis of your ability to pay to pay your tax liability. The process is document intense and complicated. Most people do not have the necessary skills or knowledge of the IRS collection process to make an offer in compromise that is in their best interest. You should consult an experienced tax lawyer before attempting to make an application for an OIC with either the IRS or ADOR.

At McFarlane Law, PLC, based in Scottsdale, Arizona, our attorneys help clients throughout the United States apply for and obtain offers in compromise. We can conduct a evaluation of your current financial situation and make necessary recommendations. You can rest assured that by engaging our services, our attorneys will act as your advocates and seek to resolve your IRS problems. Contact us to learn more about this process.

Pursuing a Compromise Payment You Can Afford

If you’ve been audited and assessed with a tax liability, you have several payment options. If your priority is to resolve the tax controversy as quickly as possible but you cannot afford to pay the full assessed liability, you may wish to make an offer in compromise. The other options are an installment agreement or a collection hold.

Taxpayer Tip: The OIC application process takes six to nine months for the review of the application. If the offer in compromise is accepted, they will accept a percentage of the amount you owe as payment in full of your tax debt. That amount can be paid in a lump sum, by installments, or via both upfront partial lump sum and installments.

You may have seen television ads suggesting that it is possible to compromise for as little as 10 cents on the dollar. This is possible, but very rare. Since the IRS’s decision on your offer in compromise will be based on your financial position and ability to pay the debt, your offer needs to be accompanied by extensive documentation, including financial statements.

There is often much negotiation required before a settlement can be reached. The entire process generally takes about nine months.

Exploring Your Options if You Are Denied

If the IRS denies your offer in compromise, a taxpayer generally has one of two other options: either the taxpayer will enter into an installment agreement, or the IRS will declare your account temporarily non-collectible and will delay any collection efforts (except the IRS and ADOR will file tax liens on any property you may have).

It is possible to appeal the denial of the offer in compromise and/or the underlying tax assessment. Such appeal necessitates professional legal counsel. We at McFarlane Law, PLC work daily on such issues with the IRS and ADOR. Don’t hesitate to call us at 480-991-0032 for skilled legal assistance at any stage of the offer in compromise process.

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