How to get Offer in Compromise Approved –  Use Former IRS Agents

I am a Former IRS agent and teaching instructor of the offer in compromise program.
I understand the complete inner workings of the Internal Revenue Service and how to get an offer in compromise approved.
The Internal Revenue Service is making it much easier for taxpayers to get an offer in compromise approved.
Last year, 58,000 offers in compromise were filed by taxpayers with the Internal Revenue Service.
IRS accepted 38% of all offers in compromise filed by taxpayers.
The average settlement was $.14 on a dollar.
Taxpayers should know that there are 7500 cases sitting in the Internal Revenue Service queue at this time and offers in compromise take anywhere from four months to eight months to work.
It is much better for taxpayers to file an offer in compromise when they have received their CDP letters because the offers usually take a shorter period of time to work.
 
How to Get Your Offer Approved
It is all about knowing the IRS settlement formulas.
To get your offer in compromise approved you must know the systems, the formulas, and be familiar with the national standard test used by Internal Revenue Service to accept offers in compromise.
IRS will look at two main factors in settling your case.
The Internal Revenue Service is concerned about your income and your assets.
Regarding Assets
You must give IRS the total liquidity you have in all your assets or your offer in compromise will not improved.
This  includes equities in vehicles, Ira, pensions and basically anything that has value. IRS will want you to surrender that equity to them  and make them part of the settlement.  Since the Internal Revenue Service can seize all those assets they absolutely mandate that that liquidity be part of the offer.
Regarding Income
IRS will want to know what the value of your current monthly income.  IRS will compare your current income against the national, regional and local standards tests that you can find on our website or on IRS.gov.
Internal Revenue Service will find out if you have any disposable income after subtracted against the national, regional and local standards.
Any money left over monthly is multiplied  by 12.
IRS  will simply add up your total asset liquidity plus the value of your disposable monthly income and that will be the base amount of your offer to the Internal Revenue Service. The Internal Revenue Service will accept no less than that amount.
 
Other Factors
IRS will also  at the full body of the case such as age, education level , medical conditions, prospects for more income.
Please understand IRS will Google your name and many times look at credit reports for hidden information you have not disclosed to them. Understand that IRS does conduct asset and name searches.
 
The New Fresh Start Tax Program to get your Offer in Compromise Approved
The Internal Revenue Service another expansion of its “Fresh Start” initiative by offering more flexible terms to its Offer in Compromise (OIC) program that 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.
This focuses on the financial analysis used to determine which taxpayers qualify for an OIC. This announcement also enables some taxpayers to resolve their tax problems in as little as two years compared to four or five years in the past.
In certain circumstances, the changes include:
1. Revising the calculation for the taxpayer’s future income.
2. Allowing taxpayers to repay their student loans.
3. Allowing taxpayers to pay state and local delinquent taxes.
4.Expanding the Allowable Living Expense allowance category and amount.
 
What is a Offer in Compromise
The OIC is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed.
An OIC is generally not accepted if the IRS believes the liability can be paid in full as a lump sum or a through payment agreement.
The IRS looks at the taxpayer’s income and assets to make a determination of the taxpayer’s reasonable collection potential.
Offers in Compromise  are always subject to acceptance on legal requirements  and always must be approved by District Council of the Internal Revenue Service.
The IRS recognizes that many taxpayers are still struggling to pay their bills so the agency has been working to put in place common-sense changes to the OIC program to more closely reflect real-world situations.
 
Settlement types for Offer in Compromise
When the IRS calculates a taxpayer’s reasonable collection potential, it will now look at only one year of future income for offers paid in five or fewer months, down from four years, and two years of future income for offers paid in six to 24 months, down from five years.
All offers must be fully paid within 24 months of the date the offer is accepted. we have had many clients have their offers in compromise accepted only to failed to meet the terms. If that happens IRS keeps all monies paid to IRS and starts  the enforcement action in the cycle all over again.
Some of the Forms for the Offer in Compromise
The Form 656-B, Offer in Compromise Booklet, and Form 656, Offer in Compromise, has been revised to reflect the changes.
Other changes to the program include narrowed parameters and clarification of when a dissipated asset will be included in the calculation of reasonable collection potential.
In addition, equity in income producing assets generally will not be included in the calculation of reasonable collection potential for on-going businesses.
Allowable Living Expenses per the National Standards
The Allowable Living Expense standards are used in cases requiring financial analysis to determine a taxpayer’s ability to pay.
The standard allowances provide consistency and fairness in collection determinations by incorporating average expenditures for basic necessities for citizens in similar geographic areas.
These standards are used when evaluating installment agreement and offer in compromise requests.
The National Standard miscellaneous allowance has been expanded to include additional items. Taxpayers can use the miscellaneous allowance for expenses such as credit card payments and bank fees and charges.
Guidance has also been clarified to allow payments for loans guaranteed by the federal government for the taxpayer’s post-high school education.
Payments for delinquent state and local taxes may be allowed based on percentage basis of tax owed to the state and IRS.
Taxpayers wishing to settle their case with an offer to compromise  should do so by  the use of a professional tax firm that has filed  at least 100 offers in compromises.
Unless you have extensive working knowledge of the Internal Revenue Service  the odds of getting an improved offer in compromise are slim.
I’ll suggest taxpayers who want to do this on their own walk through  the IRS pre-qualifier tool that they can find on our website.
It is understandable that taxpayers do not want to pay in the neighborhood of $5000 for a professional firm.
If you do this on your own, hazards that exist.
However , this pre-qualifier tool at least will give the taxpayers a better understanding of the offer in compromise program.
Please call us today for a free initial tax consultation.
 
How to Get a Offer in Compromise Approved –  Use Former IRS Agents