Offer in compromise negotiations are notoriously difficult to argue and win. Key to successfully mitigating your debt is to accurately show you are in no position to pay back all of the debt you owe the IRS—now or in the near future—and proposing a reasonable collection potential that is acceptable. Determining the right reasonable collection potential is difficult. On average, the IRS accepts only 16% of OICs. You will need a litigator, like tax attorney or CPA, who is certified to handle IRS debt.
Avoid “Settle OIC claims now!” scams
There are all matter of scams out there promising quick and easy ways out of debt and a brand new beginning. The IRS is not an institution reputed for its lightheartedness. Most of these businesses will only type out your offer in compromise forms and, with any luck, make sure they are properly filed the first time. After that, you are on your own. You can expect to be in dialogue with the IRS, and will need someone to advocate on your behalf, as you go haggle back and forth with the IRS.
Go with a certified tax professional
Even if you don’t hire a lawyer, you need someone who knows the tax code inside out. This person should know the current and standing laws that dictate tax collection and what the IRS looks for when evaluating OICs. You can reasonably expect to be in litigation for at least a year, and want to be sure all of your Ts are crossed and your Is are dotted—failure to do so will result in a returned Offer In Compromise, and could mean a full scale audit.
Most tax professionals will cost between 1,200 and 3,500 dollars. They are worth every penny. They will walk you through the process and prepare any extra documentation required during an OIC. Most of them are skilled negotiators that will know when to push and when to bend during an OIC.