Former Settlement IRS Agents- Offers in Compromise – How to Get a Tax Settlement 1-866-700-1040
The only way you are in a get an IRS offer in compromise accepted is through filing hundreds of offers in compromise or knowing the internal systems of the Internal Revenue Service. Because of our years of work experience at the Internal Revenue Service we know the internal workings of the Internal Revenue Service.
We are comprised of former IRS agents, managers and tax instructors. We worked and taught the IRS offer in compromise program while employed by the Internal Revenue Service.
We not only work the offer in compromise program as former IRS agents we taught the tax debt settlement program.
We have over 60 years of direct working experience at the Internal Revenue Service and the local, district, and regional tax offices.
We are tax experts in IRS collection matters and especially the offers in compromise.
If you want to know the most effective way on how to get an IRS tax settlement contact us today for a free initial consultation and we will review the entire process with you.
You get an IRS tax settlement by knowing the system, knowing the process and being familiar with all the rules and regulations that govern the offering compromise. It extremely difficult for an unseasoned person to get an offer in compromise accepted by the Internal Revenue Service. I hate to tell you this but as a former IRS agent the IRS will always look to reject the offer rather than to accept the offer because of the sheer volume of work it takes to accept the offer in compromise.
The new pre-qualifier program by Internal Revenue Service for the offer in compromise
There is a new pre-qualifier tool out for offers in compromise that is available on our website. Before any taxpayer contemplates the filing of an offer in compromise or a tax debt settlement they should walk in themselves through the process to make sure they are not throwing away money on a program that they will not qualify for.
Facts about Offers in Compromise
- There are 58,000 offers in compromise filed every year and about 18,000 of those tax debt settlements are approved by the Internal Revenue Service.
- The average settlement is somewhere around $.14 on a dollar.
- The average wait time for an offer in compromise is 6 to 9 months.
- All offers are approved by the Internal Revenue Service are a matter of public record in regional locations and available to anyone up for time period of one year.
- Also the taxpayer should be aware that the IRS offer in compromise takes somewhere in the neighborhood of 10 -30 hrs. for IRS agent to completely work.
- All offers in compromise that are filed with the Internal Revenue Service has to be thoroughly documented.
- It also should be known that IRS will pull credit reports and probably Google your name and may even pull up a LEXIS-NEXIS.
- The IRS may also use a Accuriant search to do a complete and thorough financial investigation to make sure that all the information you place on your offer in compromise is true and correct.
The IRS Offers In Compromise
An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer’s tax liabilities for less than the full amount owed.
If the tax liabilities can be fully paid through an installment agreement or other means, the taxpayer will in most cases not be eligible for an OIC.
In order to be eligible for an OIC, the taxpayer must have filed all tax returns, made all required estimated tax payments for the current year, and made all required federal tax deposits for the current quarter if the taxpayer is a business owner with employees.
In most cases, the IRS will not accept an OIC unless the amount offered by the taxpayer is equal to or greater than the reasonable collection potential.
The RCP is how the IRS measures the taxpayer’s ability to pay.
The RCP includes the value that can be realized from the taxpayer’s assets, such as real property, automobiles, bank accounts, and other property.
In addition to property, the RCP also includes anticipated future income, less certain amounts allowed for basic living expenses. You should remember the only thing that IRS is interested in our assets and income. Any liabilities that you have are very little concern of the Internal Revenue Service.
The IRS may accept an OIC based on three grounds.
First, acceptance is permitted if there is doubt as to liability.
This ground is only met when genuine doubt exists under applicable law that the IRS has correctly determined the amount owed.
Second, acceptance is permitted if there is doubt that the amount owed is fully collectible. This is Doubt to liability.
This means that doubt as to collectibility exists in any case where the taxpayer’s assets and income are less than the full amount of the tax liability.
Third, acceptance is permitted based on effective tax administration.
An offer may be accepted based on effective tax administration when there is no doubt that the tax is legally owed and that the full amount owed can be collected, but requiring payment in full would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances.
Doubt as to collectibility or based on effective tax administration
When submitting an OIC based on doubt as to collectibility or based on effective tax administration taxpayers must use the most current version of Form 656 (PDF), Offer in Compromise, and must also submit Form 433-A (PDF), Collection Information Statement for Wage Earners and Self-Employed Individuals, and/or Form 433-B (PDF), Collection Information Statement for Businesses.
You can find those forms on our website.
A taxpayer submitting an OIC based on doubt as to liability must file a Form 656-L (PDF), Offer in Compromise (Doubt as to Liability), instead of Form 656 and Form 433-A and/or Form 433-B.
Application fees for the Offer in Compromise
In general, a taxpayer must submit a $150 application fee with the Form 656. Do not combine this fee with any other tax payments.
There are, however, two exceptions to this requirement.
a. First, no application fee is required if the OIC is based on doubt as to liability.
b. Second, the fee is not required if the taxpayer is an individual (not a corporation, partnership, or other entity) who qualifies for the low-income exception.
This exception applies if the taxpayer’s total monthly income falls at or below 250 percent of the poverty guidelines published by the Department of Health and Human Services.
Section 4 of Form 656 contains the Low Income Certification guidelines to assist taxpayers in determining whether they qualify for the low-income exception.
A taxpayer who claims the low-income exception must complete section 4 of Form 656.
Different IRS Payment options for Offers in Compromise
Taxpayers may choose to pay the offer amount in a lump sum or in installment payments.
A “lump sum offer” is defined as an offer payable in 5 or fewer installments and within 24 months after the offer is accepted.
Lump Sum Payments for offers in compromise
If a taxpayer submits a lump sum offer, the taxpayer must include with the Form 656 a nonrefundable payment equal to 20 percent of the offer amount.
This payment is required in addition to the $150 application fee.
The 20 percent amount is called “nonrefundable” because it cannot be returned to the taxpayer even if the offer is rejected or returned to the taxpayer without acceptance. The 20 percent amount will be applied to the taxpayer’s tax liability.
The taxpayer has a right to specify the particular tax liability to which the IRS will apply the 20 percent amount.
The Periodic Payment Offer
The offer is called a “periodic payment offer” under the tax law if it is payable in 6 or more monthly installments and within 24 months after the offer is accepted.
When submitting a periodic payment offer, the taxpayer must include the first proposed installment payment along with the Form 656.
This payment is required in addition to the $150 application fee. This amount is nonrefundable, just like the 20 percent payment required for a lump sum offer.
Also, while the IRS is evaluating a periodic payment offer, the taxpayer must continue to make the installment payments provided for under the terms of the offer.
These amounts are also nonrefundable. These amounts are applied to the tax liabilities and the taxpayer has a right to specify the particular tax liabilities to which the periodic payments will be applied.
The Statutory Time will be extended
Ordinarily, the statutory time within which the IRS may engage in collection activities is suspended during the period that the OIC is under consideration and is further suspended if the OIC is rejected by the IRS and where the taxpayer appeals the rejection to the IRS Office of Appeals within 30 days from the date of the notice of rejection. The normal statutory period of time for IRS to collect a tax liability is usually 10 years from the initial date of assessment.
If the IRS accepts the taxpayer’s offer, the IRS expects that the taxpayer will have no further delinquencies and will fully comply with the tax laws.
If the taxpayer does not abide by all the terms and conditions of the OIC, the IRS may determine that the OIC is in default. you must be careful to read the terms if your IRS offer in compromise is accepted. Many taxpayers who have not filed and paid their taxes after their offers were accepted may find their offers in compromise later denied because of the rules that exist.
For doubt as to collectibility and effective tax administration OICs, the terms and conditions include a requirement that the taxpayer timely file all tax returns and timely pay all taxes for 5 years from the date of acceptance of the OIC.
When an OIC is declared to be in default, the agreement is no longer in effect and the IRS may then collect the amounts originally owed, plus interest and penalties. Additionally, any refunds due within the calendar year in which the offer is accepted will be applied to the tax debt.
If the IRS rejects an OIC,
If the IRS rejects an OIC, then the taxpayer will be notified by mail.
The letter will explain the reason that the IRS rejected the offer and will provide detailed instructions on how the taxpayer may appeal the decision to the IRS Office of Appeals.
The appeal must be made within 30 days from the date of the letter.
In some cases, an OIC is returned to the taxpayer, rather than rejected, because the taxpayer has not submitted necessary information, has filed for bankruptcy, has failed to include a required application fee or nonrefundable payment with the offer, or has failed to file tax returns or pay current tax liabilities while the offer is under consideration.
A return is different from a rejection because there is no right to appeal the IRS’s decision to return the offer.
If you have any questions about an IRS offer in compromise call fresh start tax to speak directly to former IRS settlement agents.
We can tell you exactly how to get in IRS tax settlement. We are A+ rated by the Better Business Bureau of been in private practice since 1982.
