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How to Hire an OIC Tax Attorney

We’ve covered offers-in-compromise (OICs) before in our blog posts.  That’s for good reason: here at Mackay, Caswell & Callahan, tax relief is a major area of our practice.  OICs can be a very attractive option for resolving back tax debt in certain cases. When someone owes tax debt to the IRS, he or she can submit an OIC.  It allows the debtor to pay a lump sum less than the full amount owed. Many states which impose a state income tax also have their own OIC programs.  They have their own unique procedure and program requirements. OICs can be very advantageous for debtors in many situations.  Given that they can be so useful, it’s not surprising that they can take quite a bit of work to properly prepare. OICs have to follow certain rules and guidelines in order to be accepted by the IRS.  It’s also not surprising that following these rules and guidelines is not a simple task. For these reasons, hiring a professional to assist with OIC preparation can be a very worthwhile investment. 

In this post, we will discuss in detail two primary benefits taxpayers gain by hiring a tax attorney to help prepare an OIC. There are other benefits to hiring an OIC tax attorney, but in our view these two benefits stand out. If you owe the IRS, or to a state with an OIC program, you should consider making an OIC request.  Even if your OIC is ultimately unsuccessful, you can always explore another alternative, such as an installment payment agreement (IPA).  

Expertise is Key

Easily one of the biggest benefits to hiring a tax attorney for help with OIC preparation is expertise. As we mentioned, the IRS weighs OIC applications according to certain established criteria.  In consequence, it’s important that taxpayers are familiar with the criteria before making an OIC submission. An OIC tax attorney will already have a firm understanding of these OIC requirements.  Based on that understanding, the OIC tax attorney should be able to give a taxpayer a good sense of whether the OIC  will be accepted. In contrast, a taxpayer filing their own OIC may be unfamiliar with the types of OICs that exist.  Alternatively, the taxpayer may be unaware of the threshold allowables applied in the OIC review process.  As a result, an OIC application can be denied based on a multitude of reasons.

It’s important to recognize that there are three distinct categories of OICs.  In consequence, selection of the correct category is a critical component of submitting a successful OIC application. Tax attorney expertise is particularly important in category selection.  A good OIC tax attorney should  be able to listen to the specifics of a situation and provide an answer to the question of category eligibility relatively quickly. Given the stakes, it’s not surprising that OICs require significant time and energy.  It’s also clearly in the taxpayer’s best interest to ensure that an Offer has the highest likelihood of acceptance. Viewed in that light, OIC tax attorney expertise is critical.

Advanced Understanding of Reasonable Collection Potential

The IRS considers each OIC independently and gives a holistic analysis which takes account of multiple pieces of data. It will look at your ability to pay and whether payment would create undue hardship on the taxpayer; the IRS also looks at your current income, expenses and liabilities, and the value of your assets. After looking at all of these separate factors, the IRS then develops a sense of what it is likely to be able to collect in a reasonable period of time and then compares that figure to the amount offered in the OIC. The figure developed by the IRS is referred to as a taxpayer’s “reasonable collection potential” (or RCP) and is critical in determining whether a given offer be accepted. A skilled and intelligent tax attorney will have an advanced understanding of this analysis and be able to give useful counsel on what figure is sensible in an OIC.  

Experience Counts

The best OIC tax attorneys have more than a basic understanding of OIC procedures and technical requirements.  In addition to knowledge, the best attorneys have years of practical experience to draw on to for a client’s benefit. That’s a unique “value add” that’s hard to quantify. Think about it.  If a tax attorney has assisted multiple taxpayers with their OICs and witnessed the outcomes of those attempts, he or she brings all  that experience, and those perspectives to a given matter. There’s also the distinct possibility that the tax attorney has already seen a similar tax scenario.  That allows experience tax counsel to provide an in-depth analysis that a novice attorney just can’t offer.

New York Tax Attorneys

As was stated at the beginning of this post, tax relief is a major part of our practice here at Mackay, Caswell & Callahan.  We take pride knowing that we’ve successfully helped so many clients resolve their tax debts and move forward in life. We understand the need for tax relief and are passionate when representing our clients. We’ve also handled plenty of OICs.   If you’re considering an OIC as a possible solution to a tax debt, don’t hesitate to contact one of our top New York City tax attorneys and let us examine your case. We’re available to handle both IRS OICs and New York OICs for you. 

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