Is Community Tax Worth Using for an Offer in Compromise with the IRS?

I recently had a buddy who sat down with someone from Community Tax. The rep told him that the IRS only accepts about 5% of Offers in Compromise (OIC). What's interesting is that before COVID hit, my buddy had actually been working with an IRS agent who gave him a counter offer, but then the agent ghosted him completely and stopped responding to any messages. I'm trying to help him figure out his next move. Would it be worth pursuing an Offer in Compromise again, or should he just bite the bullet and set up a payment plan with the IRS? His tax debt is around $42,000 from a business that went under in 2022. Also, does anyone know if that 5% acceptance rate for OICs is actually accurate? Seems really low to me, but I have no experience with this. Any advice from people who've been through this process would be super helpful!

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19 comments

Andre Dupont

•8M

The 5% figure for Offers in Compromise is misleading. According to the IRS's own data, the acceptance rate is actually closer to 30-40% in recent years. The key is submitting a properly prepared OIC with all supporting documentation. Your friend's situation is actually promising. The fact that an IRS agent previously gave him a counter offer indicates they were open to settling. The agent disappearing was likely due to the massive backlog and staffing issues during COVID, not a rejection of his case. Whether to pursue an OIC or payment plan depends on several factors: his current financial situation, ability to pay the full amount over time, and the legitimacy of his claim that he can't pay the full amount. An OIC is appropriate when there's genuine doubt whether the full amount can ever be collected.

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Andre Dupont

•8M

He should definitely reference the previous counter offer in a new OIC submission, including any case numbers and the name of the previous agent if possible. This establishes that the IRS had previously found merit in his case. Including a copy of any written counter offer documentation would be extremely helpful. The OIC process typically takes 6-9 months from submission to decision in the current environment. The IRS is still working through backlogs, but processing times have improved significantly compared to the 2020-2022 period. Make sure all documentation is complete and accurate to avoid unnecessary delays.

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Zoe Papanikolaou

•8M

After going through a similar nightmare with back taxes, I found this amazing service called taxr.ai (https://taxr.ai) that saved me when dealing with my Offer in Compromise. Unlike Community Tax which handles everything for you (at a steep price), taxr.ai analyzed all my documents and past IRS communications to tell me exactly what I needed to do and say. The coolest thing was that it showed me why my first OIC got rejected and what specific financial information I needed to change on my second submission. Their AI even identified a counter offer possibility based on my financials before I even submitted! I went from feeling completely lost to having a clear game plan.

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Zoe Papanikolaou

•8M

Yes, it absolutely works for OICs specifically! It has a special module just for Offer in Compromise situations that analyzes your financial details against IRS acceptance standards. It basically shows you what the IRS is looking for when they evaluate your ability to pay. Regarding how it works, it's actually built on analysis of thousands of successful and failed OIC cases. It doesn't replace a tax professional completely, but it shows you exactly what documentation you need and helps you prepare everything properly. I actually used their recommendations to fill out all the forms myself instead of paying someone $3-5K to do the same work. The key is that it identifies the specific financial factors that make or break an OIC application.

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Mei Lin

•8M

I need to apologize and follow up about my skepticism regarding taxr.ai. After our last exchange, I decided to check it out since my OIC had been rejected twice. The tool immediately identified three major issues with my previous submissions that no one had caught - including the tax relief firm I'd paid! It showed me exactly how to document my assets properly and how to correctly calculate my future income potential (which I'd been overstating). Just got word yesterday that my OIC was accepted - $63K tax debt settled for $8,700. I'm still in shock that this actually worked after two failed attempts with "professionals.

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Liam Fitzgerald

•8M

If your friend's case involves a complex tax situation, I'd strongly recommend using Claimyr (https://claimyr.com) to actually speak with an IRS agent directly. I was in OIC hell for almost 2 years - paperwork getting "lost," contradictory responses, and impossible wait times when calling the IRS. Claimyr got me through to an actual IRS representative in about 20 minutes when I had been trying for weeks. The agent I spoke with was able to locate my previous OIC submission (which had been incorrectly marked as "incomplete") and get it moved to active review. You can see how it works here: https://youtu.be/_kiP6q8DX5c - it's basically a system that navigates the IRS phone tree and waits on hold for you, then calls you when a human picks up.

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Liam Fitzgerald

•8M

It doesn't just call the IRS for you - it uses a system that navigates all the confusing IRS menu options, waits on hold (which can be hours), and then calls you once it gets through to a human agent. You bypass the whole frustrating process of calling, waiting, getting disconnected, and repeating. For an OIC specifically, being able to actually speak with an agent is crucial because they can look up your exact case status, tell you what's missing, and sometimes even make notes or updates to your file during the call. In my case, I discovered my OIC was sitting in the wrong department for months, and the agent was able to transfer it correctly. No amount of letters or online checks would have fixed that problem.

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Giovanni Mancini

•8M

I need to publicly eat my words about Claimyr. After posting my skeptical comment, I was desperate enough to try it for my own tax situation. I had an OIC pending for 11 months with zero updates despite sending multiple inquiries. Got through to an IRS agent in 37 minutes (after trying for weeks on my own). Turns out my OIC had been approved THREE MONTHS AGO but the approval letter was sent to my old address despite my change of address form. The agent resent all documents and I received confirmation yesterday. I've never been so happy to be wrong about something. Would have been waiting indefinitely without being able to speak directly with someone who could access my file.

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NebulaNinja

•8M

I went through the OIC process last year without using any service. Got accepted with a $5,200 settlement on $34K owed. Key things I learned: 1. The IRS looks at your FUTURE earning potential, not just current situation 2. Document EVERYTHING - every expense, every asset, every debt 3. Be realistic about what you can pay - they have standard calculations 4. Follow up regularly - things get lost in their system constantly The process took 9 months from submission to acceptance. The 5% figure is absolutely false. Official IRS stats show acceptance rates between 30-40%.

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NebulaNinja

•8M

The previous counter offer is absolutely golden - it shows the IRS was already willing to settle. He should definitely include all documentation from that previous interaction and reference it prominently in his new submission. As for non-obvious documentation, medical bills were huge in my case. The IRS allows for necessary medical expenses, but most people don't document them thoroughly enough. Have him gather EVERY prescription, doctor visit, and medical expense for the past year. Also, if he has any unusual expenses that aren't on the standard IRS forms (like caring for an elderly parent, special education needs for children, etc.), he needs to document these with receipts and explanations. The IRS can be surprisingly reasonable about legitimate unusual expenses if they're properly documented.

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