Offer in Compromise Assistance in Bakersfield, CA – Pros & Cons

Tax relief from the IRS may be claimed in various forms. One of the most widely availed options is that of Offer in Compromise (OIC). An OIC allows you to pay lower than actual tax liability to settle your debts with the IRS. However, it is not easy to get your OIC approved. 

You may need professional guidance and support to materialize this option. Are you looking for an Offer in Compromise assistance in Bakersfield, CA? While you should seek assistance, you need to first weigh the pros and cons of any such offer. 

The fact of the matter is that an OIC is not always feasible. So, let’s get started with understanding various pros and cons in the context of OIC.

Pros of Offer in Compromise:

An Offer in Compromise has several upsides. The most critical ones are discussed below:

1: Affordable Payments

The most obvious benefit of OIC is that payments are more affordable for you. You get to pay a reduced amount to settle your debt. 

In some cases, you may also be able to pay in installments, allowing you better personal financial management. Hence, it becomes easier to pay off your outstanding debt.

2: Obligation Resolution

Your tax debt might be pending for several years. Apart from mental stress, it would also negatively affect your credit score among other things. 

By gaining an opportunity to settle tax liability, you get to resolve long-standing obligations.

3: Prevent Assets Seizing

When already in financial distress, you don’t want to let your assets be seized by a government agency. It can very much happen if you continue to fail paying your taxes. 

However, you can prevent this from happening by successfully completing an OIC program. Hence, you get to keep control over your bank account and other assets.

4: Debt Reduction

By settling your tax liability, you get to reduce your overall debt burden. It can help in improving credit score. 

This will eventually be helpful in securing more debt from other sources in the future.

Cons of Offer in Compromise

You need to understand that going for OIC is not free from certain downsides. You need to consider the following points before applying for an OIC to the IRS.

1: Excessive Data/ Documentation

When trying to secure OIC, the IRS shall demand a lot of data and documentation in most cases. It gets worse if your OIC is rejected. 

In such a case, the tax authorities may use the same data against you and compel you to make full payments.

2: Time and Effort

An OIC is not a simple thing to secure. You need a lot of patience and effort to actually make it happen. 

In some cases, it may take up to several months and tons of meetings with tax authorities. All of this comes at both financial as well as mental peace cost.

3: Consultation Fee

It is very rare for anyone to secure OIC on one’s own, especially for laymen. Hence, you need to hire professional consultancy service. Needless to say that professional help comes at a price. 

In some cases, the cost of professional help may outweigh financial gains from OIC.

4: No Tax Credits For You

If you choose to apply for OIC, you are no longer eligible for claiming tax credits and other relevant benefits during the following year. 

Moreover, the requirements for OIC qualification are usually very strict, and most individuals simply fail to meet the requirement guidelines. Hence, you need to carefully assess your circumstances before filing an OIC application with the IRS.

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