Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/a26f9f83/public_html/articles/includes/config.php on line 159
IRS Offer-in-Compromise, Hype or Hope? > NetSparsh - Viral Content you Love & Share

IRS Offer-in-Compromise, Hype or Hope?

"Settle for Pennies on the Dollar! IRS debts settled for $20 Wipe out the Penalties with an Offer"-such is the language of Offer-in-Compromise promoters. What they fail to tell you is that one has to qualify for an Offer and few taxpayers will be able to meet the tough standards for an OIC.

The Offer-in-Compromise (OIC) has been around for a long time, but it wasn't until 1992 that IRS started really using the program in good faith. After the Revenue Reform Act of 1998, IRS became even more liberal with the OIC. At one point almost half of all Offers were being accepted. Unfortunately, in 2002, the IRS started getting tough on Offers and now only about 25% of all Offers are accepted. The main reason for the decline was the centralization of Offers at two IRS locations instead of them being worked locally at the district offices.

An Offer can be made for "Doubt as to Liability" or "Doubt as to Collectability." Submitting a proper OIC is more than just filling out an IRS Form 656. A good offer must have 3 recent months of supporting documentation attached with the Form 656 (if the OIC is for doubt as to collectability). Failure to fill out the Form 656 properly, failure to include all liabilities, or failure to provide the documentation required results in an Offer that is dead on arrival. Even if the forms are complete and the data provided; the Offer is now just "processable" and 6-9 months may go by before a decision is reached on the merits of the OIC.

Unscrupulous Offer Promoters often don't qualify people for the Offer, they just sell them a bill of goods. Folks can pay thousands and not have a chance at an OIC to begin with! Don't do business with anybody that doesn't at least take a full financial statement from you. If the matter is Doubt as to Liability, no financial is required, but there needs to be a solid basis for the claim in law and policy.

The main items that often sink an Offer when someone does qualify based on income and expenses are assets such as IRAs, 401Ks and home equity. If you owe the IRS 25K but you have an IRA worth 50K and home equity of 50K, forget about an OIC. There would have to be a horrible circumstance in your life to get past the equity in assets. In very rare cases of health or old age, exceptions can be made. Just because you can't pay your bills on time doesn't make you an Offer candidate. You must not be able to full pay based on income and expenses plus the "quick sale" value of your assets. Only then is a Doubt at to Collectability Offer an option.

If you qualify, you really can settle for "pennies on the dollar," but it might be 30-50% of your debt based on the math. To settle for $500 you would have to be broke with no assets at all and no prospects for near term improvement of your financial situation. See a CPA, Tax Attorney, or Enrolled Agent if you are considering an Offer. They can go over all of your options.

You can learn more about Offers at these websites:

www.irs.gov
www.naea.org
www.nsacct.org
www.etaxes.com
www.exirsman.com

James Robert Coleman, E.A., A.T.A.
Enrolled Agent, Accredited Tax Advisor, former IRS Revenue Officer. Member-National Association of Enrolled Agents & National Society of Accountants.

In The News:

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news

Italy's Taxes Drive Economy Underground
Seeking Alpha
Italy's problem, similar to many of its southern European neighbors, is an oppressively high tax burden, irresponsible welfare programs that encourage high measured unemployment and increase the debt, and high levels of regulation. Consider Italy's ...


Vox

To stop endless war, raise taxes
Vox
The economist Adam Smith recognized how war taxes curbed the public's appetite for war hundreds of years ago. Observing the variation in how European governments paid for the wars of the 1600s and 1700s — debt or taxes — he wrote: “Every new tax is ...


Tax Foundation

Are Sugar-Sweetened Beverage Taxes Regressive? Evidence from Household Retail Purchases
Tax Foundation
Taxes on sugar-sweetened beverages are proposed with the promise to improve public health outcomes, but they come with equity concerns because of their regressive nature. We use Nielsen consumption data to explore the relationship between ...


Barron's

Paradise or Money Pit? What You'll Pay in Taxes When Buying a Home Abroad
Barron's
Glynna Prentice can list a number of reasons why she loves her refuge in the highlands of Guanajuato, Mexico. The home's two-story glass walls offer mountain views, it's in an artist community, and is a three-hour flight from Los Angeles. And there's ...


USA TODAY

Planning a move? By 2021, these 8 states will have no income tax
USA TODAY
Without beating around the bush, let me just say what's on all of our minds when it comes to taxes: They stink! No one likes preparing their taxes or handing over their hard-earned money to Uncle Sam. It is, however, a necessary thing we do as working ...


Stanly News & Press

Homeowner owes 10 years back taxes on dilapidated home
Stanly News & Press
The owner of 608 Summit Ave. in Albemarle asked city officials in May to spare his house from demolition so he could fix it. The house was originally put on the city's demolition list in 2016, and has been below minimum housing standards for several ...


MyAJC

Court rules airport shop operator need not pay Clayton property taxes
MyAJC
The Georgia Supreme Court ruled Monday that Clayton County cannot receive property taxes from concessions at Hartsfield-Jackson International Airport, a decision the could cost the county millions. The unanimous ruling said operators of shops and ...

and more »

Slow start in Louisiana's latest special session on taxes
New Orleans CityBusiness (blog)
The Louisiana House got off to a slow start Tuesday in the latest special session on taxes, with no votes on tax bills and a rehashed debate over budget issues from prior sessions. The House Ways and Means Committee talked about sales tax proposals, ...

and more »

BBC News

The NHS, taxes and that 'Brexit dividend'
BBC News
"It is our firm intention to reduce taxes on British businesses and working families." Page 14 of the Conservative Party's 2017 manifesto is clear and could have come straight from the pen of Philip Hammond. The chancellor, those close to him repeat, ...
Theresa May Could Fund the NHS Without Breaking Her Tax PromisesBloomberg
June 18, 2018 - TwitterTwitter

all 33 news articles »

Illinois News Network

Rural Illinois power plant has higher tax bill than Disneyland, Willis Tower
Illinois News Network
A plot of land in rural northern Illinois has the highest property tax bill in the United States outside of New York. Assessed at $546 million, Exelon's Byron Nuclear Generating Station was charged $36.5 million in property taxes in 2017. That's a ...

Google News

10 Thoughts on Tax Offer in Compromise

Beware of advertisements that claim to settle tax debts for... Read More

Surprising Truths About Tax Preparers

Choosing the right tax preparer for your business is a... Read More

Need a Copy of Your Tax Return Information?

Taxpayers have two easy and convenient options for getting copies... Read More

How To Claim CHILD TAX CREDIT The Right Way And Add An Extra $2,000 To Your Refund

The U.S. Department of Agriculture estimates that it costs nearly... Read More

Slash Tax when Buying a Business

When buying a business, how the "purchase price" is made... Read More

To Tax or Not to Tax - This is the Question

To tax or not to tax - this question could... Read More

Tax Trap #2 -- Double Taxation: Isnt Once Enough?

Have you been thinking about incorporating your small business or... Read More

Deducting Points On Home Refinances

Deduction of Refinance PointsAny points that you pay in the... Read More

Insider Guides to IRS Audits!

Ever wish that, as a business owner, you knew exactly... Read More

The Tax Man Cometh... To Search

You're at your office, or home, and the doorbell rings... Read More

Save Money on Taxes - Let Uncle Sam Pay for Your Fun!

"Deducting Meals and Entertainment"O.K. You've been working really hard on... Read More

Tax Trap #5 -- Ignoring The IRS (and the 5 best ways to contact them!)

We all love to criticize the IRS, don't we? And... Read More

Tax Jokes and Quotes

Do you realize that some tax forms ask you to... Read More

How To Get An Instant Pay Raise

As a gentleman was leaving my class recently, he wanted... Read More

Save Money on Taxes - Is the Only Way to Get Your Tax Savings is to Sleep With an IRS Agent?

Tilting the Tax Laws in Your Favor.In order to accelerate... Read More

IRS Lock-In Letters ? What?s An Employer To Do?

Employers often ask employees to designate the amount of tax... Read More

Understanding Basic Tax Terms

If your like many, you don't always understand what people... Read More

How to Reduce the Estate Tax Using the A-B Revocable Living Trust

In a past article I relayed the plight of the... Read More

IRS Certifies 2006 Toyota Hybrid for Clean Fuel Deduction

The Internal Revenue Service has certified the 2006 Toyota Highlander... Read More

Complaince of Tax Return in Electronic Commerce Taxation

Emerging Legal issues of Tax compliance of e-business Self-assessment system... Read More

Uncle Sam is Ready...Are You? Organizing Tips for Tax Time

Anyone who is closely related to an accountant knows that... Read More

Estate Taxes - It Pays to Plan Ahead

Estate taxes. It's not enough to simply know they exist,... Read More

Correspondence From The IRS ? Yikes!

It's a moment every person dreads. You pick up the... Read More

Tax Trap #3 -- IRS Penalties, Interest and Love Letters

As a small business owner or self-employed person, one of... Read More

Euro Tax Haven Threat

Media reporting of a new EU savings tax directive has... Read More