The Offer in Compromise is by far the most popular and one of the most effective ways to resolve an IRS tax liability. This is probably also the program that most of you have heard touted time and time again as the way to settle with the IRS for pennies on the dollar. The good news is the IRS regularly settles cases with taxpayers for a fraction of what is owed. It is a fantastic way to resolve an IRS tax problem but it does not work for everyone. What the “marketing firms” do not tell you is it may not be the appropriate resolution for you. Call me today to find out if an Offer in Compromise may work for you!
An Offer in Compromise may be based upon a doubt as to collectability, doubt as to liability or Effective Tax Administration.
The most common is the doubt as to collectability. That is when you say you owe back taxes but do not have the present ability to pay. Doubt as to collectability is the most common form of Offer in Compromise. The basics of this type of offer are that you owe taxes, do not dispute that you owe the taxes but you do not have the ability to pay the taxes in full. If an Offer in Compromise is successfully prosecuted, then you may be able to settle your tax debt for a fraction of what is owed.
The second type of offer referenced above is Doubt as to Liability. This is when you believe that you only owe a portion of the tax debt. You must have a genuine dispute as to the existence or the amount of the correct tax debt.
The final offer referenced above is the Effective Tax Administration offer. In this situation you may have the resources to pay the amount of taxes due but it would be manifestly unfair to force you to pay the full amount due. Perhaps you are elderly, have limited income and you are in poor health. You do not have the ability to access the equity in your home or to do so would leave you homeless or with increased expenses.
The Offer in Compromise program was significantly modified for the benefit of taxpayers in May of 2012. It is now easier than ever to get an Offer in Compromise approved. The offers are lower and there are now more allowable expenses available to you as the taxpayer.
Please contact me at 813.872.8787 to find out how I can help you fix your tax problem.