Offers in Compromise Strategies: Using OICs to Challenge Assessments and Request Reconsideration of Tax Bills

Filing Doubt-as-to-Liability Claims and Grounds for OICs Under Efficient Tax Administration Reasoning

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, June 27, 2017
Recorded event now available


This webinar will provide tax advisers and compliance professionals with a thorough and practical guide to navigating the IRS offer-in-compromise (OIC) procedures, detailing the three types of OIC submittals available to taxpayers. The panel will focus on using the OIC program to preserve taxpayer rights to challenge IRS assessments, and outline practical strategies for determining when to file an Offer in Compromise (Doubt as to Liability) (DATL). Participants will gain valuable tools for effectively representing taxpayers and negotiating with the IRS during the appeal process.

Description

The OIC program is one of the most misunderstood of all IRS taxpayer initiatives. For most practitioners, their exposure to the OIC program is limited to circumstances where a taxpayer has difficulty paying a tax bill due to financial hardship. There are, however, other grounds which a taxpayer may utilize in submitting an OIC, which may be less dependent on the taxpayer’s financial situation and may have a greater chance of success.

In circumstances where a taxpayer is facing a tax assessment over which there is a dispute as to the accuracy of the liability, the taxpayer may file a DATL. An offer filed under DATL carries some limitations: taxpayers may not combine a DATL with any other basis for an OIC.

However, a DATL can offer some significant advantages for taxpayers facing a disputed tax bill. Unlike other OIC requests, taxpayers filing a DATL do not have to make a financial disclosure. A DATL filing also preserves the right of the taxpayer to contest the merits of the assessment. The Service generally treats DATL filings as similar to an audit reconsideration, so practitioners should be prepared to summarize the basis for any liability challenge in filing the Form 656-L.

Tax advisers may also file an OIC based on the argument that a compromise would promote effective tax administration (ETA). This provides more of a “catch-all” reasoning based on an equity argument. This approach, however, generally requires asset and income disclosure, as well as being the last course the IRS may review.

Listen as our experienced panel provides a thorough and practical guide to the OIC program, from selecting a strategy through required filings, to minimize tax exposure.

Outline

  1. Bases for OIC available to taxpayer
    1. OIC-Doubt as to Collectibility (DATC)
    2. OIC-Effective Tax Administration (ETA)
    3. OIC-Doubt as to Liability (DATL)
  2. DATL criteria
  3. DATL standards of review
  4. OIC strategies
  5. Filing and documentation requirements

Benefits

The panel will discuss these and other important topics:

  • In what types of tax disputes may a taxpayer use an OIC DATL to try to get reconsidered?
  • Reporting mechanics for a DATL
  • What are the standards for an OIC citing ETA as grounds for a compromise amount?
  • IRS standard of review for DATL filings

Learning Objectives

After completing this course, you will be able to:

  • List the bases on which a taxpayer may submit an OIC
  • Identify the circumstances under which a taxpayer may claim a DATL
  • Recognize the standards for filing an OIC under a claim of ETA
  • Discern the filing and documentation requirements that must accompany a Form 656-L OIC-DATL
  • Decide on strategies for preserving taxpayer rights to challenge assessments using a DATL

Faculty

Benjamin J. Peeler, J.D., CPA, LL.M., Partner
Eide Bailly, Utah

Mr. Peeler leads his firm's IRS Practices & Procedures team as a federal tax, controversy and procedure specialist. He works with clients in the controversy areas relating to income tax, estate and gift tax, property tax, employment tax and other various tax matters. He represents clients before the IRS in examination, appeals, collection, penalty abatement, audit reconsideration, interest abatement and interest netting. Previously, he worked as an attorney for the IRS Office of Chief Counsel, and also, led and instructed groups of attorneys, revenue agents and revenue officers through various procedures.

A.J. Gross, CPA, EA, President and Founder
ALG Tax Solutions, Howell, Mich.

Mr. Gross helps individuals and businesses handle tax problems with the IRS or state. Since beginning his career in tax resolution, he has assisted hundreds of clients in resolving their tax issues. He works with his clients to solve complex financial problems and to customize workable tax solutions.

Howard S. Levy
Voorhees & Levy, Cincinnati

Mr. Levy is a former IRS trial attorney with over 20 years of experience representing individuals and companies facing tax controversies. His expertise includes finding solutions to IRS collection problems, with an emphasis on the use of bankruptcy.He is a regular contributor to journals and newspapers regarding the IRS. 


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