(Miami, FL) – If you are a struggling taxpayer, this article is for you. The IRS has implemented policy changes that will allow hundreds of thousands of taxpayers settle their IRS tax cases for pennies on the dollar. “This new policy shift will allow struggling taxpayers to settle their cases, release Federal Tax Liens, and move on with their lives,” says Michael D. Sullivan, a leading tax resolution specialist at Fresh Start Tax LLC.
This single major change is probably one of the biggest shifts in the history of the Internal Revenue Service (“IRS”) in regard to their Collection Division Policy and will have a greater positive impact than any IRS program in the past.
This expansion of the “Fresh Start” initiative is offering more flexible terms to the Offer in Compromise (OIC) program. This will enable some of the most financially distressed taxpayers to clear up their tax problems and, in many cases, more quickly than in the past. In general, an Offer in Compromise is a legal agreement between a taxpayer and the IRS that settles the taxpayer’s tax liability for less than the full amount. For more information about Offer in Compromise, please visit freshstarttax.com/offer-in-compromise.php.
“The IRS (www.irs.gov) finally did something to help taxpayers who are really struggling”, says Sullivan, co-founder of Fresh Start Tax. “This shift is long overdue for taxpayers.” As a former IRS Agent and teaching instructor with the IRS, Sullivan feels that with the past program, taxpayers really had no chance of settling their tax debt. ” It gave false hope to many taxpayers. The former rules were antiquated giving taxpayers a false hope of tax relief. Now “pennies on a dollar” is now possible.”
Past Offer in Compromise/ Tax Debt Settlements acceptance rates
After each fiscal year, the IRS publishes their data-book giving statistical figures for all of their operations including Offers in Compromise/ Tax Debt Settlements
For Fiscal Year 2008: 44,000 Offers in Compromise submitted – 11,000 accepted For Fiscal Year 2009: 52,000 Offers in Compromise submitted – 12,000 accepted For Fiscal Year 2010: 56,000 Offer in Compromise submitted – 14,000 accepted For Fiscal Year 2011, the IRS did not reveal the total of Offers submitted or accepted but Scott Reisher, Director of the IRS Collection Division, stated that 34% of all offers were accepted.
For all years, the average settlements were in the neighborhood of 14¢ on the dollar.
What to expect in the future
The flood gates will soon open and the IRS will be inundated with the filing of Offers in Compromise or tax debt settlements. The question that needs to be answered is very simple.
Does the IRS have the work force to keep up with the Offers that will be filed? Presently in their system over 8,000 Offers in Compromise have not even been assigned to agents. Sullivan feels ” right now is the time to settle”. Apparently the IRS needs the revenue to keep up with the budget shortfall and they are willing to lower the bar on settlements to collect whatever revenue.
Sullivan says, “I would expect that in this fiscal year, the IRS will accept at least 40% of all Offers in Compromise, with close to 100,000 Offers being filed.”
Fresh Start Tax, LLC is a professional tax resolution firm. On staff are Board Certified Tax Attorney’s, CPA’s and Former IRS Agents, Managers and Instructors. We have over 206 years of professional tax experience and over 60 years of direct IRS experience. Also on staff are former IRS Agents who taught the Offer in Compromise Program while employed with the IRS.
To learn more about Fresh Start Tax, LLC, please visit www.freshstarttax.com or call us at (800) 700-1040.