Rejected Offer in Compromise – FIGHT BACK & WIN – IRS OFFER APPEALS SPECIALIST, FORMER IRS
Having been a Former IRS agent and instructor I worked my share of offers in compromise for the IRS.
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Things you should know about offers in compromise .
Even though the IRS has a new Fresh Start Program and proudly proclaims it is now ready to settle, the truth of the matter, the IRS employees do not like working Offers.Why? they take to long to work, the managers must review and if accepted the General Council for IRS must approve the Offer. That means your work is subject to constant review. It is far easier to look for reason to reject the offer that have it accepted.
Hiring tax professionals that know there way around the IRS.
Being Former IRS Agents and Instructors we know our way around the system. It is all about the packaging. If we can make it easy for the IRS agent you have a far greater chance of the IRS accepting the offer if you met the terms of the offer.
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The Process of the Offer in Compromise Appeal.
If you received a letter notifying you that your offer was rejected you have 30 days to request an appeal of the decision.
You can request an IRS Tax Appeals conference by:
1. preparing either a Form 13711, Request for Appeal of Offer in Compromise, or
2. a separate letter with the following information included:
a. Name, address, social security number, and daytime telephone number
b. A statement that you want to appeal the IRS findings to the Appeals office
c. A copy of your rejected offer letter
d. Tax period or years involved
e. A list of the specific items you don’t agree with and a statement of why you don’t agree with each item
f. Any additional information you want Appeals to consider
g. The facts supporting your position on any issue that you do not agree with
h. The law or authority, if any, on which you are relying
i. Sign the written protest, stating this it is true under the penalties of perjury
In preparing a request for an appeal, compile a list of specific with which items you do not agree and include a statement explaining why you disagree with each item.
Consider using Form 13711 in the preparation of your appeal.
You may also find a review of the following beneficial to review your denial letter and gather the correct facts so the IRS Agent can understand what you disagree with. you should start with the:
1. Your Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals,
2. the supporting documentation submitted with the Form 433-A
Check your figures and calculations again and verify the documents you submitted to Collection.
The Monthly Income/Expense Statement (see Section 4, Page 4) requires you to provide the following:
1. Proof of pay stubs and earnings statements of gross earnings and deductions for the past three months from each of your employers,
2. Proof of pension, social security and/or other income for the past three months,
3. Current statement(s) from the lender on your automobile(s), including the monthly payment and balance due for each vehicle,
4. Current statement(s) from all lien holders on your residence, including the amount of the monthly payment and balance due for each lien,
5. A copy of your last filed Form 1040 with all schedules, and
6. Proof of current expenses paid for the past three months including utilities, rent, insurance, property tax, non-business transportation expense (i.e. car payments, lease payments, fuel, oil, insurance, registration, parking), healthcare (including insurance premiums co-payments, other out-of-pocket expenses) and court-ordered payments. All documnents must be attached with clear copies of receipts.
Common Mistakes for the OIC
a. The amounts used on the Monthly Income- Expense Statement of Form 433-A could be different than the amounts used on the IET worksheet for food, clothing, miscellaneous, transportation, housing and utilities, out-of-pocket healthcare and other expenses.
b. Collection Financial Standards are used to help determine a taxpayer’s ability to pay a tax debt. All standards, except miscellaneous, are derived from the Bureau of Labor Statistics (BLS) Consumer Expenditure Survey (CES). These financial standards are explained below:
c. National standard expense allowed for food, clothing and miscellaneous monthly expense. The standard amount is computed based upon your income and family size instead of actual expenses.
d. National standard expense allowed for out-of-pocket health care expenses including medical services, prescription drugs, medical supplies (i.e. eyeglasses, contact lenses, etc.). This amount is based on Medical Expense Expenditure Panel Survey data and is in addition to the amount paid for health insurance.
e. Housing and utilities expense allowed for housing and utilities monthly expense. The standard amount is computed based upon the state and county where you reside and your family size.
f. Transportation expense allowed for monthly transportation expenses. The standard amount is computed by combining the standard for ownership cost and operating cost. This is based on the number of vehicles you own and the region you live.Note: Certain assets such as vehicles, and real estate should be valued at the quick sale value. This is the amount you can sell the asset today.
g. You may compute the value of a vehicle by consulting a trade association guide for the fair market value and discounting the value by 20%. You may compute the value of real estate by an appraisal, the replacement cost value on your residence and possibly the taxable value of your home.
Lastly make sure all documents and letters of explanation are attached.
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