How Do You Qualify For An OIC?

VIDEO TRANSCRIPTION – How do you qualify for an offer in compromise? Hi, I’m Stephen D. Cooper, also known as Coach Coop with Cooper’s Accounting Service, because your financial freedom matters.

If you’d like to learn more great tax tips, download our popular financial guide at our website, yourfinancialfreedommatters.com, or click on the link below. As I was having a lunch meeting, someone asked me exactly what is an offer in compromise.

and how do you qualify for it? First of all, an offer in compromise is an agreement between a taxpayer and a tax authority such as the IRS or a state tax agency to settle debt less than the amount that you owe. Just to let you know, at the state level, some states, for example, California, do not offer an offer in compromise. Going into an offer in compromise,

The two main qualifications are if you, financial hardship, if you have a medical emergency or you change jobs. Those are the two financial hardships that will qualify you for offering compromise. You need to complete Form 656. Some of you may have to do Form 433F for individuals and for business owners. It is Form 433B.

You must be transparent with the IRS. What do I mean by that? That means that you need to disclose everything on the application because the IRS will be doing a background check using your social security number. So if you have any other assets such as a retirement account or a broker’s account, please disclose that. 

Trust your tax advisor.or the person that’s preparing your offer in compromise. If you don’t feel comfortable, then find someone that you’re comfortable with. You also need to gather three months of your last bank statement or other financial information. You also need to make a good faith deposit between 10 to 20%.

You would have an option of paying the fee amount once the IRS agrees upon it. You can pay the full amount or you can make 23 payments over a period of time. Also, one of the last things I wanna add, once the IRS application is approved, you may not get a refund for the next couple of years. That may be part of your agreement.

For more easy financial tips, sign up for a financial tip newsletter by going to yourfinancialfreedommatters.com or click on the link below this video. You can also download a financial guide as well. If you’d like a free 20-minute smart money consultation, us at 562-436-2600. Well again, I’m Steven D. Cooper, also known as Coach Coop, with Cooper accounting service. Don’t miss our next video where we’ll cover what are the do’s and don’ts when going through an IRS audit. See you next video.

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