Accepted Offer in Compromise (OIC) for $500 on $20k IRS tax debt - Ask Me Anything!

Did you use a tax attorney or did you do the OIC yourself? I've heard the forms are incredibly complicated and the IRS rejects most offers.

I actually completed the process myself without hiring a tax attorney. The forms are definitely complex, but I found that carefully following the instructions and being extremely thorough with documentation was key to my success. The IRS does reject many offers, but that's often because people don't provide complete financial information or offer a reasonable amount based on their situation. The key is to calculate what you can realistically pay based on the IRS's own guidelines for allowable expenses and asset valuation. I spent about three weeks gathering all my documentation before submitting.

How long did it take to get everything analyzed? My tax situation is a mess and I've been scared to even look at filing an OIC because I don't know what documentation I need or if I'd qualify.

Does it really work for complicated situations? I have self-employment income, rental property, and I did some crypto trading. I'm worried my situation is too complex for an online tool.

It took about 48 hours to get the full analysis. I uploaded my last three years of tax returns, bank statements, and other financial documents, and they processed everything quickly. Their system flagged exactly what documentation I was missing for my OIC application. For complicated situations involving self-employment, rental properties, and cryptocurrency, their system actually specializes in these complex scenarios. They have specific modules for analyzing each income stream and identifying which parts of your financial situation might qualify you for an OIC. Their tool actually helped me properly document my partially profitable side business as part of my financial statement.

How exactly does this service work? Do they just call the IRS for you? I'm confused about what they're actually doing.

Sounds like a scam to me. Nobody can get through to the IRS these days, especially during tax season. You're probably just talking to someone pretending to be from the IRS.

The service doesn't call the IRS for you - they use a system that navigates the IRS phone tree and waits on hold, then when they reach an agent, they immediately connect the call to your phone. So you're the one actually talking directly to the IRS agent. It's basically a sophisticated hold system that calls you once it reaches a human. I can absolutely confirm I was speaking with actual IRS representatives. They verified my identity using my personal tax information and were able to access my actual tax records. The agents I spoke with provided information specific to my case that only someone with access to IRS systems would know. It's definitely not a scam - it's just a service that handles the frustrating hold time so you don't have to.

They're letting me do the 5 monthly payments of $100 each, just like I proposed in my offer. It's such a relief compared to what I was paying before. As for conditions going forward, yes there are a few important ones. I have to stay completely current on all tax filings and required payments for the next 5 years. If I miss any tax returns or owe additional taxes during that period, the IRS can revoke the entire agreement and I'd be back on the hook for the original amount (minus whatever I've paid). Also, any tax refunds I would've received for the tax year when the offer was accepted get kept by the IRS, but that's a small price to pay.

When I did an OIC a few years ago, my credit actually improved because the tax lien was removed after acceptance. The IRS files a Notice of Federal Tax Lien when your tax debt gets high enough, and that definitely hurts your score, but once your OIC is accepted and paid, they remove it.

The documentation was definitely the most time-consuming part! Here's what I had to submit: I filled out Form 656 (the actual Offer in Compromise) and Form 433-A (Collection Information Statement). For the 433-A, I had to provide three months of bank statements for all accounts, pay stubs, proof of all my expenses (rent receipts, utility bills, car payment, insurance, medical expenses, etc.), and verification of any assets I owned. The key was being super detailed about my expenses and making sure I had documentation for everything. I also included a hardship letter explaining why I couldn't pay the full amount - in my case, ongoing medical expenses and reduced income due to changing jobs. One thing that really helped was organizing everything by category and creating a cover sheet for each section. The IRS examiner who called me actually commented on how well-organized my submission was and said that made their job easier. Honestly, it's a lot of work, but for me, getting rid of $27k in tax debt for $500 was absolutely worth the effort!