MJ Blog
How to Navigate an Offer in Compromise
Presented by MJ Tax Relief Group | Serving Clients Nationwide from Columbus, GA
Are you overwhelmed by tax debt and wondering if the IRS Offer in Compromise (OIC) program is your solution? This comprehensive guide from MJ Tax Relief Group walks you through every step of the process—from determining eligibility to submitting your application—so you can confidently pursue debt relief. Learn how our experienced tax professionals help clients nationwide secure favorable outcomes with the IRS and regain financial control.
Key Takeaways
The Offer in Compromise (OIC) program allows qualified taxpayers to settle tax debt for less than owed
Financial hardship and realistic payment capacity are core eligibility factors
Documentation accuracy and IRS compliance are crucial for success
Working with a tax relief professional significantly boosts your approval chances
Maintaining IRS compliance post-approval is essential for long-term financial health
Understanding the Offer in Compromise Program
An Offer in Compromise is a tax resolution program through which the IRS agrees to accept a reduced amount as full satisfaction of your tax debt. The IRS considers your ability to pay, income, expenses, and asset equity before accepting your offer.
What Qualifies as an Offer in Compromise?
To qualify, you must prove that paying the full tax amount would cause significant financial hardship. Eligibility is primarily based on:
Inability to pay based on assets and income
Complete and accurate financial disclosure
Adherence to IRS tax filing requirements
Pro tip: Engaging a tax attorney or enrolled agent can streamline the process and improve your odds of approval.
Why the IRS Accepts Tax Settlement Offers
The IRS reviews OIC submissions based on three primary considerations:
Key Factor | What It Means |
Financial Hardship | You cannot reasonably pay the full tax debt |
Expense vs. Income | High living expenses relative to income support your case |
Asset Evaluation | Limited equity in assets can justify a lower offer |
Common Misunderstandings About Offers in Compromise
Myth | Reality |
"Anyone can qualify" | Only those with legitimate financial hardship are eligible |
"It’s a quick fix" | The process can take months and involves strict documentation |
"All tax debts qualify" | Certain penalties or debts may be excluded |
"You don’t need a tax attorney" | Professional guidance improves accuracy and reduces risks |
Assessing Your Eligibility with MJ Tax Relief
Before submitting Form 656, it's vital to evaluate your financial position. MJ Tax Relief will help you:
Review income, assets, liabilities, and tax filings
Identify any tax liens or compliance issues
Calculate your “reasonable collection potential” to determine offer terms
Initial Evaluation Includes:
Checking credit and bank accounts
Reviewing Form 1040 data
Examining eligibility for tax credits or deductions
The Offer in Compromise Application Journey
Step 1: Gather Financial Documentation
You’ll need income statements, mortgage records, utility bills, and account balances to complete IRS Form 433-A (individuals) or 433-B (businesses). MJ Tax Relief helps ensure all necessary documentation is prepared accurately.
Step 2: Complete IRS Form 656
Form 656 is your formal offer. It details your proposed settlement amount, payment plan, and financial circumstances. Accuracy is critical here—errors can lead to rejection.
Step 3: Submit Your OIC Package
MJ Tax Relief submits the completed OIC package on your behalf, including all financial forms and supporting documentation.
Step 4: MJ Tax Relief Represents You During IRS Review
We communicate directly with the IRS, respond to their inquiries, and advocate for your best interests throughout the evaluation process.
The Value of Working With MJ Tax Relief
Benefit | How It Helps You |
Expert Guidance | Ensures forms and financials are accurate and compelling |
Reduced Stress | We handle communication with the IRS |
Time Savings | Speeds up the process and avoids unnecessary delays |
Stronger Case | Our strategies increase your chances of approval |
Overcoming Challenges in the OIC Process
OIC Rejection or Return
If the IRS rejects your offer, we’ll review the reason, revise your documentation, and file an appeal if necessary.
Appeals & Reconsideration
Our team prepares strong, data-driven appeals that clarify discrepancies and improve your offer’s credibility.
Maintaining IRS Compliance
Post-approval, you must stay current with tax filings and payments for five years—or your OIC could be revoked. MJ Tax Relief provides ongoing guidance to ensure full compliance.
Life After an Approved Offer in Compromise
Once your OIC is accepted and payment terms are fulfilled, it’s time to focus on rebuilding your financial health. MJ Tax Relief supports you by:
Ensuring timely tax filings and payments
Helping secure the release of federal tax liens
Offering continued financial planning and compliance support
Ready to Resolve Your Tax Debt?
Navigating the Offer in Compromise process with the IRS doesn’t have to be overwhelming. MJ Tax Relief Group, based in Columbus, GA, offers nationwide assistance with personalized strategies tailored to your unique financial situation.
Contact MJ Tax Relief Group today for a free consultation—and take the first step toward lasting financial freedom.
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