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An Unsure Thing

Can't pay your federal tax bill? Don't count on the IRS offer-in-compromise program to help.

This story appears in the July 2003 issue of Entrepreneur. Subscribe »

Do you have a huge federal tax bill you can't pay? If you were thinking of applying for the IRS offer-in-compromise (OIC) program to settle your debt, you may have to rethink your plans. The program, which lets taxpayers settle their tax bill for less than the full amount owed, needs to be overhauled, says the IRS Oversight Board. The criticism is due to the IRS not resolving such cases as quickly as taxpayers want, says PricewaterhouseCoopers tax partner Marty Janowiecki. "There's a backlog of cases, with insufficient IRS personnel to quickly settle them," he says.

Even so, the IRS says it's taking steps to improve the program, which was never intended to be a solution for all taxpayers who owe money on a tax account. "The IRS is striving to establish a balance between providing quality and timely assistance to taxpayers whose situations warrant submission of an OIC, while administering the other collection programs," says Cheryl Sherwood, director of payment compliance for the IRS.

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