Choosing a Tax Professional for OIC Guidance
The Full OIC Guide is at: Offer In Compromise Guide
Filing for an Offer in Compromise (OIC) is a lengthy and complicated process—there are sundry forms to be filled out, a whole host of details to be furnished, and many documents to be submitted. You cannot be blamed if you feel bewildered by the entire process and find yourself wishing for help. Considering that the IRS is known to reject close to 80% of OIC claims, it is only natural that you should seek experienced professional assistance to prepare your claim. So, how do you choose a tax professional who can do the best job of handling your Offer in Compromise? Here are some tips:
- Choose a tax professional who is qualified to prepare your OIC claims. A tax professional must hold a valid and updated preparer tax identification number (PTIN) to be able to prepare your OIC claims. However, if you want the tax professional to also represent you and your collection matter before the IRS, then he must be an attorney, a CPA, or an enrolled agent. Also look around for professionals who have considerable experience in dealing with revenue officers, the Appeals and the Automated Collection Systems divisions.
- Check your tax professional’s licenses. Ask to see the tax professional’s licenses. Ask him or enquire elsewhere if he is continuously updating himself on IRS collection matters is a primary criterion for holding the license. You should always hire the services of such an individual who is bound to keep abreast of the latest taxation rules and amendments.
- Carry out a background screening of the tax professional. You are entitled to carry out a background screening of a particular tax professional; after all, he is charging you for his services and you are divulging your confidential financial statements to him. Check with your local Business Bureau’s office about the credentials of a tax professional. You can also enquire with your state’s accountancy board for certified public accountants, the IRS Return Preparer Office, and your state’s bar association of attorneys if any disciplinary action had been undertaken against a tax professional.
- Do not go by low fees. You need to understand that filing for an OIC is no short of a Herculean task and those tax professionals who claim to do it for an abysmally low fee will be sure to cut corners. It is most likely that these professionals will only prepare the OIC forms for you and not prepare the all-important supporting documents or negotiate on your behalf with the IRS. Steer clear of these professionals and instead choose a reliable person with an impressive track record.
- Choose a tax professional who can create a plan B, in case the IRS rejects your offer. Empirical evidence shows that the IRS only approves about 15% of all OIC claims—they sit on the merits of each and every case and probe into the unique financial condition of every claimant minutely. So, a tax professional can only do so much to improve the chances of your claim being approved; he cannot guarantee it! But an experienced professional can prepare an alternate course of action in case of an IRS rejection so that you can still resolve your tax dues.
Patience is a Virtue
Filing for an OIC claim and having the IRS come to a decision about your claim can take any time between a year and two years. So, it is imperative that you choose a reputable tax professional who is not only experienced and competent but also makes you feel comfortable about working with them.