3 Reasons Your Tax Practice Needs an IRS Offer in Compromise Calculator

October 11, 2022

Tax resolution professionals know that one of the most important services they can provide their clients is proactive, successful negotiation with the IRS. In many cases, that means an Offer in Compromise (OIC). Like any agreement, a great OIC is one in which neither party entirely prevails but in which all stakeholders walk away feeling satisfied. Consider the case of a taxpayer who has fallen into arrears. Coming to the table, the IRS would love to collect every dime of back taxes owed to the United States government, if possible. The taxpayer, on the other hand, would be happy if they could walk away from the situation with no financial consequences. Sometimes neither scenario is feasible. The IRS hopes that if your client had the resources to pay their taxes in full, they would have done so by now, and so do you. The agents working on your client’s case are willing to negotiate, but only to the point allowed in their guidelines. You’ve got to submit a proposal that your client can afford and that the IRS finds palatable, but how will you determine what that looks like? The best way to make it happen is with an IRS Offer in Compromise calculator like the one that’s built into IRS Solutions.

Easily and Quickly Determine Client Account Status

One of the first things you’ll do for a new tax resolution client is to determine the status of their account. That might mean concluding that their case is Currently Not Collectible (CNC) or determining and leveraging accurate Collection Statute Expiration Dates (CSEDs). In many cases, you’ll need to determine the client’s eligibility for an Offer in Compromise (OIC) to settle an outstanding debt, then craft and submit that offer on their behalf. The best way to make that determination is by using specialty software. There are several options available to you. IRS Solutions was created by tax professionals for tax professionals and includes everything you need to succeed, including solution recommendations. After you’ve gathered and input your initial client data and used our ultra-fast API to retrieve and translate their IRS transcripts, you’ll get an IRS options summary. This will let you know what you can and can’t do and advise your client of the best next steps. The system will also generate a detailed, easy-to-understand report for you to review with your client, showing that you have analyzed the case and helping your client understand the path forward, and let them know why you are the best person to assist.

An IRS Offer in Compromise Calculator Boosts Chances of Acceptance

If you determine that an Offer in Compromise is best for your client, the next step is determining the best offer you can make on their behalf. In recent years, the Internal Revenue Service has accepted only around 30% of the OICs that it has received. The odds are greatly increased if you submit an offer of what the IRS is willing to accept as using IRS Solutions Software takes all IRS guidelines into consideration. A successful OIC will have to take several factors into account, including balance due, current assets, income and expenses, and the client’s CSED. The amount owed will come directly from the IRS. Be sure to counsel resolution clients that they must be fully transparent when disclosing assets and income. The IRS will not look favorably on bad-faith dealings. They’ve also got to keep expenses to allowable, modest levels, adhering to IRS allowable living figures for budget items such as rent, food, car payments, and insurance. They must disclose not only salary figures but also alimony, rental fees on property, and all other sources of income. You’ll also need to determine whether your client can afford a lump sum (five or fewer monthly payments) settlement or require a payment plan. IRS payment plan options range from six to 24 months in duration and are determined based on a combination of assets and monthly remaining income. There was a time when you had to sit down with paper, pencils, and an adding machine to use those figures and manually calculate your offer, then put it in an envelope and cross your fingers. Today, there’s a better way. IRS Solutions members can have their clients easily enter their asset, income and expense data themselves. The secure portal will help clients answer questions at their leisure and members will receive notification when completed. IRS Solutions software will take into account what is owed and what their financial situation is and then make an optimized recommendation; giving members a full report to give to their clients.

Live Your Best Life In and Out of the Office with an OIC Calculator

According to the Association of International Certified Public Accountants, the numbers of people entering the profession continued to decline in 2021. Quality of life and job satisfaction issues are among the reasons for this drop-off, particularly the long hours and seasonally erratic workload traditionally associated with life as a financial professional. Not coincidentally, these are also common reasons for transitioning to a practice that specializes in tax resolution. Tax resolution specialists typically earn more in fewer hours per week than their peers do. To achieve this goal, you’ve got to make smart choices about prioritizing work for yourself and your staff, spending as much time as possible on revenue-generating tasks, and as little as possible on chores that eat time without adding to the bottom line. An OIC calculator takes one time-consuming task off your to-do list, freeing you up to devote those hours to more professionally and personally rewarding tasks. What could you do with those reclaimed hours? Whether your goal is to attract and serve more clients or to leave the office a little bit earlier each day to spend more time with your family, adding an IRS Offer in Compromise calculator to your practice can help you get there.

Additional Resources

We dive deeper into working an Offer in Compromise and the benefits of an IRS Offer in Compromise calculator in these 2 guides:

Try Tax Resolution Software with a Built-In IRS Offer in Compromise Calculator

Are you ready to find out how using tax resolution software with an OIC calculator can transform your practice? We’ll be happy to give you a one-on-one tour of IRS Solutions, a Tax Pro’s Best Friend. Schedule your demo today.

ABOUT THE AUTHOR

David Stone

Helping Accountants Save Time at IRS Solutions

David Stone, an enrolled agent and founder of IRS Solutions, leverages his comprehensive IRS experience to empower tax professionals in navigating complex tax disputes. A proud alumnus of California State University Northridge, David’s journey began as a Revenue Officer at the IRS, where he embraced diverse roles, including working the lien desk and becoming an Offer in Compromise specialist. His transition from the IRS to founding IRS Solutions Valencia was driven by a vision to simplify tax resolution. David’s ingenuity led to the creation of IRS Solutions Software, embodying his commitment to providing effective tools and sharing his extensive knowledge with professionals in the field. As the bestselling author of “Tax Breaks for the Rich and Famous” and “The Great Tax Escape,” David’s expertise continues to guide business owners and accountants alike.

3 Reasons Your Tax Practice Needs an IRS Offer in Compromise Calculator

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David Stone

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Sign up for the Newsletter:

Keep Reading for More Insights...

Keep Up with Changes to the Internal Revenue Manual and Internal Revenue Code

New Wage and Income Transcripts Summary Tool Simplifies Transcript Analysis

How to Improve the Tax Busy Season: A Tax Pro’s Survival Guide

Member Services

IRS Solutions vs. Others

By Practice Size

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David Stone

Helping Accountants Save Time at IRS Solutions