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OFFER IN COMPROMISE - a potential solution to compromise IRS tax debt - settle with the IRS - avoid wage garnishments and IRS levy

IRS Offer in Compromise, IRS Levy, IRS Liens, IRS Garnishments; State of California Offer in Compromise, Levies, Liens and Garnishments - Solutions.

With over 25 years of experience, I offer personal attention to resolving your IRS tax problem. Solutions may involve obtaining a release of your bank levy or wage garnishment, an installment agreement,  Offer in Compromise, statute of limitations analysis, abatement, or other relief.

Call to discuss your situation with the Attorney who would actually be working your case. 

Call 1-866-482-9707.

Some information concerning Offers in Compromise is set forth below.

Fresh Start Offer in Compromise

   References/Related Topics


IRS Announces More Flexible Offer-in-Compromise Terms to ... 8/2012   

   Related Items:

FAQs for New Offer in Compromise Rules    (copy at TaxSOS.com 6/2014)

IRS Offer In Compromise - IRM Provisions:  See Offer in Compromise IRM



What is an Offer in Compromise?

An IRS offer in compromise is an agreement between a taxpayer and the Internal Revenue Service (IRS) that resolves a taxpayer's tax liability. The IRS has the authority to settle, or compromise, federal tax liabilities by accepting less than full payment under certain circumstances. The IRS may legally compromise for one of the following reasons:

  • Doubt as to Liability Offer in Compromise: Doubt exists that the assessed tax is correct.
  • Doubt as to Collectibility Offer in Compromise: Doubt exists that the taxpayer could ever pay the full amount of tax owed. The minimum offer amount must generally be equal to (or greater than) the taxpayer's reasonable collection potential (RCP). The RCP is defined as the total of the taxpayer's realizable value in real and personal assets, plus his/her future income.

Unless the taxpayer files an offer in compromise claiming special circumstances, the offered amount must equal or exceed the reasonable collection potential. Realizable value is the asset's quick sale value (amount which could be reasonably expected through the sale of the asset) minus what the taxpayer owes to a secured creditor.

  • Effective Tax Administration Offer in Compromise: There is no doubt that the tax is correct and no doubt that the amount owed could be collected in full, but exceptional circumstances exist such that collection of the full amount would create economic hardship or where compelling public policy or equity considerations provide sufficient basis for compromise.  The taxpayer bears the burden of proof to show their offer in compromise qualifies for public policy or equity considerations.  They must show that their circumstances are compelling enough to justify acceptance of their offer in compromise compared to other taxpayers in similar circumstances.

Offer in Compromise and IRS Policy:

 Policy Statement P-5-100 states:

The Service will accept an offer in compromise when it is unlikely that the tax liability can be collected in full and the amount offered reasonably reflects collection potential. An offer in compromise is a legitimate alternative to declaring a case currently not collectible or to a protracted installment agreement. The goal is to achieve collection of what is potentially collectible at the earliest possible time and at the least cost to the Government. The Toll Free Number for an Offer in Compromise is 1-866-482-9707.

Submit your Free Offer in Compromise Consultation request   

New Streamlined IRS Offer in Compromise Package (Cost $800.00)  from TaxSOS.com Check out the competition about the IRS Offer in Compromise program.. After you speak to them, contact  TaxSOS.com

Please read about the IRS Offer in Compromise program, below (Why an Offer in Compromise, and will it work for you?). It is important that you learn about the process and what is actually involved. If you have questions, please call me. If what the competition tells you sounds to good to be true, it probably is.

TaxSOS.com is offering a Streamlined IRS Offer in Compromise Package at a reduced price.

Do you owe a lot to the IRS but can't afford to pay thousands of dollars for a Tax Attorney prepared and negotiated Offer in Compromise?   Call today and find out if your facts and circumstances qualify for this special processing package. 

In the event  your particular facts and circumstances don't qualify for the TaxSOS.com Streamlined IRS Offer in Compromise Package,  you will be advised of the cost for your particular situation. There is no obligation. If you have decided to fix your tax problem, then give TaxSOS.com a call.

 

Why an Offer in Compromise, and will it work for you?

As you have most probably discovered, the IRS Offer in Compromise is appropriate for solving many tax problem situations. Certainly, everyone would like to settle for "pennies on the dollar". 

The reality is that for some taxpayers an Offer in Compromise is a viable option. For others it is not. You should first determine whether you qualify.  Discussing your case with an experienced Tax Attorney is the first step.

The Internal Revenue Service has issued a consumer alert advising taxpayers to beware of promoters’ claims that tax debts can be settled for “pennies on the dollar” through the Offer in Compromise Program. This IRS advises that such promoters make money by inappropriately advising indebted taxpayers to file an application for an offer in compromise with the IRS, promising unrealistic results, even when the taxpayers do not meet the requirements of the program. This bad advice costs taxpayers money and time. 

For those of you who qualify for an Offer in Compromise, your tax debt may be Settled for Pennies on the Dollar, your tax liens will be released, and all collection action on the old tax debt will be stopped. Trying to accomplish an Offer in Compromise without professional assistance is generally not recommended.

The IRS has a large amount of unsettled tax accounts. The IRS policies and procedures for collection used in the past cost the government millions chasing after taxpayers that would not produce any results. The Offer in Compromise program makes economic sense for both the government and you, the taxpayer. For example, it helps you get back into compliance (paying and filing current and future tax obligations). For the government, it means current tax collections and revenue (and getting taxpayers into routine compliance). It affords you a  means by which you can stop worrying about  past due tax obligations which both you and the government realize you  can never pay off in full. However, negotiating an Offer in Compromise can become very involved. The IRS seeks to impose National and other standards on taxpayers without taking into account a taxpayers particular facts and circumstances as required by the law.  

 

Can you relate to that vicious cycle of being afraid to make money because of the IRS monster looming over every waking hour of your day? Have you been in the position of making payments on "back" taxes hoping to appease the IRS, and then realize that your payments didn't reduce your debt? Do you then find that your situation has worsened because you didn't pay enough in current year taxes, having used the money to pay on the old taxes? Now, you not only owe for another tax year, but the IRS views you as "pyramiding".

The Offer in Compromise program may be a solution for you. But, merely submitting an Offer in Compromise is not enough. Even getting an Offer accepted is not enough. You must set up a PLAN to ensure that all current and future taxes are full paid, and all returns timely filed. Under an accepted Offer, you agree to comply with all provisions of the Internal Revenue Code relating to filing returns and paying the required taxes for at least 5 (five) years. Thus, if you fail to meet such requirement, the "back" tax obligations return. My office provides experienced legal services in helping you set up a plan so that the Offer becomes a long term solution.

The Offer in Compromise program may be right for you. Please call to discuss your situation and a plan of action for you.    

Some links and information are provided. However, a  tax professional, who routinely deals with IRS collection matters and Offers in Compromise, should be consulted before any action is taken.

1.    

 
Reduce Your Tax Liability To The IRS Through An Offer In Compromise - points to consider.
2.   
Offers in Compromise - IRS Handbook 5.8, Ch.4 - Evaluation of Offers (Internal Revenue Manual Provisions).
3.   
OFFERS IN COMPROMISE WITH IRS: hardship, fairness, and equity. Public Policy and promoting Effective Tax Administration.
  • Historically, the Service's compromise authority has been limited to cases in which either doubt as to collectibility or doubt as to liability or both is established. The Internal Revenue Service Restructuring and Reform Act of 1998, however, has expanded the Service's compromise authority. The Service now has the authority to compromise, where appropriate, cases involving issues such as equity, hardship, and public policy. The Service may now compromise cases involving equity and hardship issues where compromise would "promote effective tax administration."
  • The effective tax administration basis for compromise applies only where the taxpayer does not meet the requirements for doubt as to liability or doubt as to collectibility ...
  • Refer to Internal Revenue Manual Provisions.
4.   
IRS Collection forms; Power of Attorney (form 2848); worksheet
5.    Offers In Compromise - Taxpayer Help and Education (IRS Tax Topic 204)

6.

IRS National Standards for Collection - Also available at IRS link

7.   

IRS Manual on Offers in Compromises - overview

       
8. 

Temporary regulations that provide additional guidance regarding the compromise of internal revenue taxes. The temporary regulations reflect changes to the law made by the Internal Revenue Service Restructuring and Reform Act of 1998 and the Taxpayer Bill of Rights II. 

9.       

National Taxpayer Advocate Releases Report to Congress, Cites Need for Aggressive Protection of Taxpayer Rights (discussion of Offer in Compromise program) - July 6, 2004

10.      

IRS Offer In Compromise Regulations - August 2002

11.     

U.S. Senate Committee on Finance letter to Dept. of Treasury, Friday, Sept. 3, 2004, advising of  concern with the Treasury’s and the IRS’s continued failure to efficiently and effectively administer the offer-in-compromise (OIC) program ... . Sept. 3, 2004, advising of  concern with the Treasury’s and the IRS’s continued failure to efficiently and effectively administer the offer-in-compromise (OIC) program ... .
12.  11-30-04 Grassley, Baucus Raise Concerns Over Offer in Compromise Program

IRS Response
13. IRS Oversight Board Hearing - Effective Collection Strategies (1-2703)

14.   

 
Some case materials on IRS Rejection of Offers in Compromise, and Abuse of Discretion:

UNITED STATES TAX COURT 
RONALD J. AND JUNE M. SPELTZ, Petitioners v. 
COMMISSIONER OF INTERNAL REVENUE, Respondent 
Docket No. 15382-03L. Filed March 23, 2005. 

The above limited information is intended for informational purposes only.  If legal advice or other expert assistance is required, the services of a competent professional should be sought, and this general information should not be relied upon without such professional assistance. 

Adobe Acrobat is needed to view the above forms.  A free version of Acrobat Reader is available  by clicking here.

CAUTION: There are many providers of services on the internet who will submit your Offer in Compromise forms. However, such providers merely have you complete the forms. These bargain basement "Offer experts" may be only mailing the forms you prepare to the Internal Revenue Service. Thus, they have done nothing for you. In fact, they may end up costing you more because critical review and analysis has not been done. When completing the financial statement forms and making the Offer, you are painting a financial picture that will determine the amount of an acceptable Offer. Unless your representative has the necessary skills and experience, you may have paid a small fee, only to be subjected to settling for more under the Offer than you otherwise should have. Your professional must have experience in: calculating your income and expenses; determining the amount of the offer you should make; valuing your assets and liabilities;  reviewing joint ownership considerations; working with the tax law and IRS internal procedures; arguing the facts and the law, and negotiating with the IRS. 

The IRS has a history of intimidation, and let's face it, they will take advantage of any taxpayer who represents himself, and even a taxpayer's advocate who is weak. Remember, IRS Offer Specialists generally have "collection" backgrounds and they come at you from the perspective of getting as much money as they can.

In the end analysis, you should measure the benefits you derive from the final result. For a taxpayer to engage someone who merely mails in your Offer forms for a $300.00 fee, what at first blush looked like "such a deal", may in reality end up costing you many thousands of dollars more because you didn't choose a tax professional who would negotiate the best settlement for you.

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For assistance please contact A. Nathan Zeliff, Attorney at Law

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