FAQ

Frequently Asked Questions

How long will it take to resolve my debt?

This depends entirely on the complexity of your situation and how quickly you can respond to requests for information. 

If you are current on your tax returns, are in compliance with current tax payments, and have required documents readily available the process will be much quicker. The more organized and prepared you are the faster we can help you. Our team will provide you with all the tools you will need to organize your documents and information for us. The first step is to contact us, the sooner we begin working on your case the sooner we can find a solution.

 

What is an Offer in Compromise? How do I know if I qualify?

An Offer in Compromise (OIC) allows taxpayers to settle their tax debt for less than they owe if they cannot afford to pay the tax debt in full or it will cause great financial hardship to do so. To determine eligibility an in depth look into your financial condition is needed. The IRS requires ample financial documentation when reviewing your application for an OIC.

The IRS charges a non-refundable $150 application fee to submit an OIC and requires an initial payment toward the tax liability. It’s important to understand all of the factors that the IRS will consider when reviewing your offer. You will have to submit a lot of financial information and it’s extremely important to send a complete application with all supporting financial documents.

It’s important to submit a reasonable and well calculated offer with a complete application package. This saves money in interest and penalties that still accrue during the application process. If the application is rejected the tax debt owed will counter productively be greater by the end of the OIC application.

Learn more about Offers in Compromise

According to the IRS, policy changes outlined in their Fresh Start Initiative, will allow more taxpayers to qualify for an OIC.

How long does it take for an Offer in Compromise to be accepted or rejected?

Typically approval can take between 3-9 months depending on the case and the amount of debt. Two years is the absolute longest that they can take.

Once your offer has been sent to the IRS they will send you a notice with the date it was received. From the received date the IRS has two years to make a decision on your case. During this time they may want to revise the offer, request additional information and often wait to see if your financial situation is likely to change. If they have not officially accepted or rejected your offer after two years, the file is automatically considered accepted.  If they reject the offer within two years you may appeal the decision which sends your file to another office, the appeals office, where they review the entire case, usually taking no more than a year.  Often times the appeals office will approve a file that the COIC unit has rejected.

Learn more about Offers in Compromise

What is an Installment Agreement? How can it help me?

An Installment Agreement is a deal made with the IRS to pay your tax debt in monthly installments until it is resolved. The amount of money you owe and your monthly income determine your monthly payments. The OMG Tax team expertly negotiates with the IRS on behalf of our clients to get them the best possible payment plan.

An Installment Agreement is easier to secure than an Offer in Compromise (OIC.) However, this option is not ideal.  It is always better to pay off your debt in full and avoid paying the IRS interest if at all possible. If you don’t qualify for an OIC then an Installment Agreement can help ease your tax burden by breaking your debt into manageable monthly payments.

The IRS announced a Fresh Start initiative that they say will help more taxpayers qualify for an OIC or Installment Agreement.

If you choose a direct debit payment agreement the fee is $52. If it is a standard monthly payment or a payroll deduction agreement the fee is $105. The fee for qualified low income taxpayers is $43.

Learn more about Installment Agreements

Do I need a tax attorney or enrolled agent to settle my debt with the IRS?

The IRS does not require you to obtain third party representation to settle your tax liabilities. However in practice, because an experienced representative knows IRS policy and procedure, IRS employees often view your case differently when you have representation. Your case moves forward in more orderly fashion, and often concludes quicker as a result.

Usually our clients have tried in vain to communicate with the IRS before they come to us. Often they claim to have gotten confusing or incorrect information after holding on the phone for an extensive period of time waiting to speak to a representative. The OMG Tax team has extensive  experience with  the policies and procedures of the IRS.  We pride ourselves on taking care of our clients and making sure they are well informed. We try to have one of our team members available to answer any questions or concerns our clients have whenever they have them. We contact the IRS for you and make sure that all of the proper steps are being taken to resolve your IRS tax matter with the best possible outcome.

What is a power of attorney? What am I agreeing to when I sign it?

The IRS requires any individual who wishes to have third party representation before the IRS to complete a Power of Attorney and Declaration of Representative, Form 2848

This document simply grants the specified individual(s) to deal with the IRS on behalf of the taxpayer. It also authorizes the representative to request and receive your tax information from the IRS. Power of Attorney and Declaration of Representative, Form 2848 is not honored for any other purpose.

Enrolled agents, tax attorneys and Certified Public Accountants are authorized to practice before the IRS. Known as recognized representatives the IRS requires third party representation complies with certain requirements for eligibility.

 

Can I negotiate with the IRS if I have not filed my previous years’ taxes?

The IRS will not consider any sort of debt relief or installment agreement until you are up to date on all of your tax returns. 

Often they will not look into your case at all until you have taken this first step. Depending on the number of years you haven’t filed your returns this can be a very daunting chore. The first step to ending your IRS debt is getting up to date on all of your returns.  Our tax team can help you take this important first step and get you on the way to IRS debt relief.

 

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