If you owe the IRS more than you could ever pay, you’re not without options. The IRS’s Offer in Compromise (OIC) program gives qualifying taxpayers the chance to resolve their debt for less than the total balance owed — legally and permanently.
At Tax Relief Heroes, Larry Kiyohiro, Esq. represents clients across Hawaii and the mainland in OIC cases, helping them understand their rights, gather accurate financial information, and negotiate fair settlements that bring true peace of mind.
The Purpose Behind the Offer in Compromise
The Offer in Compromise isn’t a loophole — it’s federal law. The IRS uses it to close cases where collecting the full amount isn’t realistic based on a taxpayer’s financial situation.
In other words, if the IRS determines that pursuing the debt would cause undue hardship or cost more than they’d recover, they’re willing to settle for less. The key is proving your situation accurately and strategically — and that’s where legal representation matters.
Who Qualifies for an Offer in Compromise
Not everyone qualifies, but many more people are eligible than realize it. You may have a strong case if:
- Your income has declined significantly
- You’re self-employed with inconsistent cash flow
- You’ve experienced medical or financial hardship
- You’re current with all required filings but unable to pay in full
The IRS bases its decision on what it calls your Reasonable Collection Potential (RCP) — a calculation of your assets, income, and basic living expenses. The lower your RCP, the more likely your offer will be accepted.
How an Attorney Prepares an Offer in Compromise
An Offer in Compromise isn’t just filling out a form — it’s a legal and financial negotiation. A well-prepared case can mean the difference between success and rejection.
As a tax attorney, Larry Kiyohiro personally reviews each client’s situation to:
- Ensure compliance with all IRS filing and payment requirements
- Calculate a settlement range the IRS will find reasonable
- Prepare Form 656 and the detailed Form 433-A (OIC) or 433-B (OIC)
- Present your case clearly and persuasively to the IRS
He also manages communication directly with IRS personnel — protecting you from missteps or misinterpretations that can derail an application.
Common Reasons Offers Are Rejected
Most Offer in Compromise rejections come down to one thing: incomplete or inaccurate information. The IRS denies thousands of offers each year because the paperwork doesn’t match their financial data or fails to meet program criteria.
Typical issues include:
- Missing or outdated financial documentation
- Unfiled returns for prior years
- Unrealistic or unsupported offer amounts
- Overstated living expenses
An attorney’s role is to ensure accuracy and compliance before submission — and to appeal if the IRS denies your offer unfairly.
Other Paths to Relief
If your case doesn’t meet OIC criteria, that doesn’t mean you’re out of options. Alternatives include:
- Installment Agreements – Affordable monthly payments based on your income.
- Currently Not Collectible Status – A pause on IRS collections during hardship.
- Penalty Abatement – Reduction or removal of costly penalties.
Each of these programs can provide meaningful relief, and in some cases, combining them can produce even stronger results.
The Value of Legal Representation
Tax attorneys are uniquely positioned to handle OIC negotiations because they combine tax law knowledge with legal advocacy.
Larry Kiyohiro ensures that every communication with the IRS serves your best interests and that your financial disclosures are presented honestly but strategically — maximizing your chance of approval while protecting your rights.
Contact Tax Relief Heroes
If your tax debt feels impossible, the right legal strategy can change everything.
📞 Contact Tax Relief Heroes today to speak with Larry Kiyohiro, Esq., an experienced tax attorney helping clients in Hawaii and across the U.S. secure fair and lasting relief through the IRS Offer in Compromise program.