Does your client owe taxes to the IRS? If so, you probably think the solution to your client's nightmare is simply to file an offer in compromise to reach a settlement with the IRS. Must be easy, too, because everywhere you look nowadays, someone is touting "pennies-on-the-dollar" settlements for IRS tax debts with "guaranteed results." Surely that's the way to go, right? But think about it. Does it sound too good to be true? Of course, it does--and it usually is. This article is designed to explain in simple terms how the offer in compromise (OIC) process works, how income tax debts can be discharged in bankruptcy, and why a "tax bankruptcy" is usually the better way to go, rendering the filing of an OIC a waste of time and money.
