DISCLOSURE OF TOTAL HOUSEHOLD INCOME AND EXPENSES

In connection with an OIC or other resolution of a federal tax delinquency, the IRS requires the taxpayer to disclose total household income and expenses.  This is applicable to a taxpayer who lives with a person who is not jointly liable for his or her tax liability, for example a spouse, significant other, roommate, etc., who files a separate Form 1040.  The IRS cannot seek to collect from the non liable person(s) who shares the taxpayer's home, but they can require disclosure of total household income and expenses for the purpose of dividing the shared living expenses between them. Usually this is done based on the percentages of their respective incomes.  For example, if the taxpayer's monthly income happens to be 55% of total household income, 55% of the shared housing costs will be the taxpayer's presumed share.

IRS COMPLIANCE REQUIREMENTS

Neither I nor anyone else can help you resolve your federal tax liability until you have filed Forms 1040 for all required years.  The IRS simply will not consider an OIC or any other resolution of your tax liability until you have done so.  Also, the IRS will not consider an OIC submitted by someone who is not in compliance with his or her current year income tax payment obligation, meaning: (1) a self employed person must have made adequate estimated income tax payments for the current year to date, or (2) a wage earner must be having adequate income tax withholding during the current year.  

Taxpayers who do not meet the above compliance requirements must not submit an OIC because the IRS will return it without consideration. Some firms which advertise OIC services fail to mention or adequately emphasize the above because their primary interest is collecting a sizable fee from you. The worst of them take your money and submit your OIC, and, if it is returned because you have not made adequate current year estimated income tax payments, it's your tough luck.  A competent, ethical tax professional will confirm that the client understands and meets the above requirements before submitting an OIC for him or her.

Since the above was not stated in the earlier revision of my website, I have frequently been contacted by prospective clients who are not in compliance, as defined above, and required by the IRS for an OIC or any resolution of a tax liability.  Since I am not a tax return preparer, I could not help them. 

WHY YOU SHOULD NOT SUBMIT AN OIC UNLESS YOU CAN EXPECT IT TO BE ACCEPTED

As explained below, taxpayers should not submit an OIC unless the IRS can be expected to accept it.  Truthfully, very few taxpayers are able to determine if they potentially qualify for an OIC acceptance, and, if so, how much the IRS is likely to accept.  Therefore, a taxpayer should not submit an OIC unless advised to do so by a competent, ethical tax professional.  Taxpayers harm themselves by submitting unsuccessful OICs because:

 1) Since July 16, 2006, non refundable payments have been required with an OIC.  An offer to pay a lump sum must be accompanied by a payment of at least 20 percent of the offer amount, in addition to a $150.00 OIC application fee.  An offer of more than 5 periodic payments must be accompanied by the first proposed payment and a $150.00 OIC application fee, and, during the time the offer is being considered, all proposed payments must be submitted.  Failure to make the above payments will be treated by the IRS as a withdrawal of the offer.  If the OIC is not accepted, the IRS applies the above payments to the taxpayer's tax liability.

 2) The Collection Statute of Limitations does not run while an OIC is pending, plus 30 days.

 3) By submitting an unaccepted OIC, you cause your account to become a high priority collection case. You must submit a great deal of financial information with your OIC, and, if it is not accepted, the IRS will use it against you, i.e., to collect your tax liability. This is done by special collection personnel working in the "Hand Off Units" located at the Centralized OIC Units, where most OICs are examined.

EXPLANATION OF MY FREE INITIAL CONSULTATION                     Probably you've looked at some of my competitors' websites, and perhaps you've seen their TV ads. If so, you know that free initial consultations are commonly offered.  As said elsewhere on this website, at many firms the free initial consultation is primarily a sales pitch after which, prospective clients are told what they wanted to hear: "Yes, you qualify for an OIC acceptance."  If the taxpayer pays a fee an OIC will be submitted to the IRS, but in a large majority of cases it will be rejected.

As an Enrolled Agent my experience with giving free initial consultations is as follows:   I have been contacted by too many people who: (1) were not in compliance, as defined above, (2) were not really serious about dealing with their tax liabilities, or (3) could not handle the truth, meaning my advice was not what they wanted to hear, so they choose not to hire me.  For that reason, my initial consultation is now focused on one objective: to identify the prospective clients that I potentially can help, meaning the ones who: (1) are in compliance, (2) are really serious about dealing with their tax liabilities, and (3) can handle the truth.  If you meet those criteria, you are welcome to contact me.  If I believe that I can help you, I will ask for the analysis fee identified on the My SERVICES page of this site, which is generally $300 to $500.00. It's a bargain for information and advice from a retired IRS Revenue Officer and OIC Examiner. For that fee I will thoroughly review your assets, liabilities, income and expenses, provide ample information and advice and determine if an OIC or one of the alternatives is feasible for you.