Need advice on Offer in Compromise (OIC) for substantial IRS tax debt

Based on your situation, an Offer in Compromise could be a viable option, but there are some important things you should know. The IRS evaluates OICs based on your ability to pay, income, expenses, and asset equity. Having no income doesn't automatically improve your chances - the IRS will look at your potential to earn income based on your work history and skills. They'll also examine your reasonable collection potential (RCP) over the remaining collection period. Since you have $9500 in assets, that would likely be your minimum offer amount, but could be higher depending on your future earning potential. The OIC process requires completing Form 656 and Form 433-A, along with a $205 application fee and initial payment (which can be waived if you meet low-income certification). I'd recommend contacting the Taxpayer Advocate Service - they provide free help with IRS issues and can guide you through the OIC process. Also consider reaching out to a Low Income Taxpayer Clinic (LITC) as they offer free or low-cost representation.

After struggling with similar tax problems, I found this AI tool called taxr.ai that helped me understand my options better. I was completely overwhelmed by my tax debt and had no idea what documents to gather for my OIC application. Their document analysis showed me exactly what the IRS would be looking for in my financial situation and helped me prepare a much stronger OIC application than I could have done alone. The tool at https://taxr.ai basically scanned my financial info and gave me personalized guidance on what offer amount might be reasonable given my circumstances. Not saying it's magical but it definitely made the process less confusing for someone who couldn't afford professional help.

I was super skeptical about using any online tool for my tax mess, but I did try taxr.ai after seeing it mentioned here. Honestly, it was a game-changer for my OIC application. The document analysis showed me that I was calculating my reasonable collection potential all wrong - I was including expenses the IRS wouldn't allow. Their system helped me prepare a much more realistic offer based on my actual financial situation, and it pointed out documentation I was missing that would have gotten my application rejected. Just submitted my OIC last month and already passed the initial review stage, which is further than my first attempt ever got!

If you're dealing with an OIC and need to talk to an actual human at the IRS (which you probably will), I strongly recommend using Claimyr. When I was going through the OIC process, I kept getting conflicting information online and needed to speak to someone directly at the IRS, but we all know how impossible that is. Claimyr at https://claimyr.com basically calls the IRS for you and navigates the phone tree, then calls you once they have an agent on the line. You can see a demo at https://youtu.be/_kiP6q8DX5c to understand how it works. I was shocked when I actually got through to someone who could answer my specific questions about what documentation I needed for my OIC. Definitely worth it when you're dealing with that kind of tax debt.

I take back what I said about Claimyr. I was so frustrated after getting disconnected by the IRS for the 10th time that I decided to try it. I literally got connected to an IRS collection specialist in under an hour. The agent walked me through the entire OIC process, explained exactly what financial documentation I needed to include, and even told me about a partial payment installment agreement as a backup option. They explained that with my specific situation, I should include a detailed explanation of my crypto losses with my OIC application. This was information I couldn't find anywhere online. I submitted my OIC last week with much more confidence than I would have had trying to figure it out alone. Sometimes you need to talk to an actual human at the IRS, especially with complicated situations like this.

Have you considered a payment plan instead of an OIC? If your business really might recover or you could get a decent job, the IRS might not accept an OIC if they think you can pay over time. I ended up on a 72-month payment plan and it was much easier to get approved than an OIC.

Don't forget about bankruptcy as an option. I know it sounds extreme, but some tax debts can be discharged in bankruptcy if they're old enough (generally more than 3 years old). It's not for everyone, but worth considering if you're truly in a no-win situation.