Offer in Compromise Calculations

[GTS1101]

I am curious to know how many of you on this board help your client's with a Offer in Compromise and how many years you have been preparing them. I am new to this process and I have learned a lot about how to make an offer but my question is those who do prepare them do you use tax software to do it or by fill in form 433 and 656. It seems like the tax software from Pitbull would save a lot of time and calculations but I am not sure it is worth the cost. I guess I could increase my charge to the client but I am curious if anyone is using it or has used it. What do you like or not like about it? Any other software besides Pitbull available. I was going to do it by hand but it seems like I could get so much more done with the software. I have about 5-10 offer's that I am going to prepare in the next six months.

Thanks!

GTS1101

[DTS]

OIC software

CFS Tax Tools offers all those forms. Makes it very easy. I have filled out more than my share by hand before I got CFS and it's a royal pain.

I'm not sure of pricing now, the link shows $189, but the company often offers discounts, so you might want to check for those. http://www.taxtools.com/

[DaveO]

I've always used the IRS forms to figure the offer. I do about 1 per year but have had every one I've done accepted. I create spreadsheets to show the calculations and worksheets as needed to backup the numbers.

[geekgirldany]

I've used the IRS forms. But I've only prepared two... well started never finished. On both cases I could not get the clients to get up the information needed. Weather it be utilities bills, canceled checks, bank account info. I got a notice the other day that one of the former clients had a OIC received by the IRS. I quickly sent in a letter to revoke the POA.

I think for myself I've decided that I won't be offering this service to clients. I might change my mind later. Depends on the client. That Pitbull software seems like it would make things a little easier with forms but it is the dealing with clients on this matter that I have trouble with.

[joanmcq]

I have all the forms available in ATX and they calculate.

[OtisMozzetti]

I think for myself I've decided that I won't be offering this service to clients. I might change my mind later. Depends on the client.

... but it is the dealing with clients on this matter that I have trouble with.

It strikes me that a taxpayer who is in the correct ballpark to justify an OIC is going to be a taxpayer who will have difficulty paying a reasonable price for the service with the OIC. Also he may likely be a taxpayer who is not currently the most cooperative about paying his bills. On top of that, the OIC process reportedly takes many, many months to get resolved one way or the other.

[geekgirldany]

Very true Otis. The first OIC I tried to complete they were wanting it accepted quickly. I had to explain that it may be from 6 months to a year before it would be accepted.

I think this is just not a service I am willing to offer. I suppose if you had other people working for you then it might be a little easier. Doing an OIC is a big job.

[DTS]

Very true Otis. ...I think this is just not a service I am willing to offer. I suppose if you had other people working for you then it might be a little easier. Doing an OIC is a big job.

Dany,

This job should be worth a few thousand $$$ to you and you should be paid 50-75% upfront and then the balance before submitting it. Hourly fees billed after that. Don't be timid putting this out to the client. I will not mess with these unless I get what I want.

[DaveO]

It strikes me that a taxpayer who is in the correct ballpark to justify an OIC is going to be a taxpayer who will have difficulty paying a reasonable price for the service with the OIC. Also he may likely be a taxpayer who is not currently the most cooperative about paying his bills. On top of that, the OIC process reportedly takes many, many months to get resolved one way or the other.

You are correct. At a minimum we charge $2,500 for the preparation of the OIC documents and I stree I need their full coopeation and complete candor about their financial situation to be successful. If I suspect they will not be honest with me or find in the beginning they have not been honest I have no trouble refusing the case.

Six months is about the minimum to get one done. They are careful not to let the 1 year window expire where default acceptance happens. I met an IRS appeals supervisor at a liason meeting a couple years ago. He heads up the OIC appeals for this district. I spent about an hour on the phone with him picking his brain about how to document certain things. He let me email him the forms I prepared prior to submission. He gave me some pointers and I revised the offer based on his input and had that one accepted in less than 3 months for the exact amount offered.