by Fresh Start Tax | Jun 24, 2020 | Tax Help
Knowledge is power, if you know the system you can have success getting IRS to accept your offer in compromise if you qualify.
So how can you get IRS to Accept your Offer in Compromise?
First of all you must know the formulas and rules regarding the OIC.
The IRS adheres to strict rules to make sure everyone is treated equal.
These rules make sure the standard applies to everyone.
There is a pre-qualifer tool you can plug in to find out if you are a go for IRS to accept your offer in compromise.
As for me, I was a former IRS agent and teaching instructor with the Internal Revenue Service. I worked in the collection division and was a seasoned, experienced, and awarded revenue officer. I worked the Offer in Compromise Program.I accepted and rejected Offer in Compromise. I know the system.
What You Should Know about The IRS Offer in Compromise
1. There is an IRS pre-qualifier tool. Use It! It tells you in minutes.
You can find the pre- qualifer tool on our website site or find it on the government website. Before you give your money to any company who claims they can settle your debt for pennies on the dollar, you best fill out the IRS pre-qualifier tool or call and experience firm to review your case to make sure you are in fact qualified.
2. How long does it take for professional to let you know your qualified to have your OIC accepted?
An experienced tax professional can let you know within about a minute whether you are qualified to settle your tax debt. By the time the person reviews the last page they will almost instantaneously let you know where you stand.
3. What is one of the most important element of getting your offer in compromise accepted by the Internal Revenue Service?
Your documented financial statement is the absolute key to getting your offer in compromise accepted.
That is the chief tool that the Internal Revenue Service uses to accept or deny your offer in compromise. It takes a skilled tax professional to make sure it is completed with all the proper documentation. That packaging is more important than you think.
4. What documentation will IRS need to accept your offer in compromise?
When you fill out the IRS financial statement, IRS will need complete documentation for any dollar number that is placed on the financial statement.
IRS will also need at least six month worth of bank statements, pay stubs and anything relative to any number that is on that form.Its like a basic audit of the 433OIC.
That form must be completely documented. Everything must match up. IRS will be looking for inconsistencies on things that are not matching up on the financial statement and documentation.
As an example, does your tax return, much up to your cost of living, your bank statements, your tax return,and your bank statements. The Agents wil look closely at these types of things.
5. How does IRS know your telling the truth and my financial statement?
The Internal Revenue Service has many search engines to use to find out all about you. The Internal Revenue Service uses internal search engines as well as external searches to find out about you. IRS will use the Accuriant search engine as well as credit bureaus
On larger cases IRS or use much more due diligence than on smaller cases.
6. Is there a specific formulas or guide lines hat IRS uses to accept the offer in compromise?
Absolutely, there is a very simple formula. Knowing is the key to getting your OIC accepted by the IRS.
IRS wants the sum total of your assets and they want to know what the value of your income and expenses. You must understand this formula.
IRS will look at all your assets and find out what the fair market value of those assets are. Real estate will be discounted by 20%. IRS will use that as a base amount to compute the asset part of what is needed for case settlement.
IRS will look at your income and expenses and make sure you fit within the national standards. As you complete the 433oic IRS will apply the national standards expenses against your income. If there is a surplus and as an example I will use $500, IRS will take that $500 and multiply it by the life of the statute.
IRS will add the fair market value of your assets plus the value of your income and add them together. That will be the base amount for the IRS to accept the offer in compromise.
7. What is another important factor for getting your offer in compromise accepted?
I cannot tell you how important timing is.
It is best to make sure you’re not in the high season of income.
It is best to file an offer in compromise when you are doing the the very worst financially.
As an example, if you are real estate salesman and you have just earned a $40,000 commission and you want to file for an offer in compromise you have jeopardized your offer because you’ve just made a large amount of money and that new income you received is going to jack up your average income for settlement.
Therefore, understanding where your income and expenses are will determine the best time to file the offer in compromise. The offer in compromise requires a great deal of planning on when the best season financially to file. Sometimes waiting couple months can be the difference between acceptance and rejection.
8. How long does an offer to compromise take to process acceptance?
You must relax. Its seems like forever.
Currently the offer in compromise takes about nine months to process and sometimes more. IRS is jammed u.
You will first receive a letter that they have received your offer and then you must wait to the offer is assigned and sent to a particular offer specialist to work your case. It is best to make sure your offer in compromise is fully documented when sending so they don’t have to send it back because if they do you you may have to start the clock all over again.
9. Another very important factor to keep in mind for the offer in compromise.
Before you send in your offer, you must’ve filed all current tax returns. The first thing that IRS will do is pull up a summary of your case history and all tax returns must be filed or IRS will send the case back.
Also you must be current on withholding or estimate payments or IRS will immediately reject the offer in compromise because you are not current and up-to-date. Do not overlook this is a sure way to get your offer sent back to you.
10.Did you Know: Accepted Offers in Compromise are a matter of Public Records, Yep!
The reason IRS is so picky about offers in compromise is because they are a matter of public record.
That’s right, for 18 months after your offer in compromise is accepted your file goes to one of six regional tax sites for public review.
Don’t be too afraid this, last year only one person inspected the files, so don’t worry are safe.
The offer in compromise is not for everyone but if your qualify, its will change your financial life and will remove the federal tax lien as well.
How Can I Get IRS To Accept My Offer in Compromise + Former OIC IRS Agent
by Fresh Start Tax | Jun 23, 2020 | Tax Help
Last year the IRS received over 59,000 offers in compromise, accepted 24,000 plus, & the average settlement was $9500. Can you settle for pennies on a dollar? Read on…………..
Can ever case be settled? NO.
Everyone is not a tax debt settlement candidate, however, last year IRS settled 24,ooo cases. Learn if you can settle your tax debt.
I was a Former IRS agent and teaching instructor with the IRS. I worked the OIC program. As a former IRS agent I accepted and rejected offers in compromise.
There is a system to know.
Before you think of filing for the program use the IRS pee-qualifer tool to make sure you are eligible.
What you Need to know about the OIC to settle tax debt for pennies on a dollar.
Revenue officer Agents work offers in compromise program:
Every IRS agent who works an offer in compromise must have training to understanding everything there is to know about the offer in compromise, what to look for, whose to accept and whose to reject. I taught the class.
I have looked at a myriad of offers in compromise throughout the years. I started working at IRS in 1973 and have been practicing ever since.
How IRS Looks at Offers in Compromise to settle tax debt for pennies on a dollar:
The Internal Revenue Service does not have to accept offers in compromise and they consider it a gift to the taxpayer to even consider settling for pennies on the dollar. You’ll find many agents have that attitude. Some are a little kinder and others make it a real chore to get your case to the system.
It is much easier for the agent who works the offer to reject the offer then to accept the offer. If the agent rejects offer in compromise, the service simply sends out a form letting you know the reasons for denial, the formulas they used and the reason for rejection. It is cold, hard, and on to the next case.
To accept the offer in compromise means reviews by sometimes three levels within the IRS institution before the offer becomes accepted. Many times the offers have to go the District Counsel, the attorneys of the IRS. Larger cases must be signed off by attorneys.
IRS so strict about the acceptance of the offer in compromise.
The offer in compromise becomes a matter of public record for 18 months at one of six district offices across the United States for the public to review.
That’s right, anybody can go and to one of the six district offices and review any accepted offer in compromise. You think there would be some curiosity seekers about this but the statistic may be a little surprising.
Only one person in the last year reviewed offers in compromise throughout the United States.
FACT:
Internal Revenue Service has set forth certain standards for accepted offers in compromise, and those are not to be broken.
Factors to know:
1.Documentation is always “king” and the key to tax debt settlement.
Most offers in compromise do not have sufficient documentation and they are rejected as they goes through the system. The package simply must have air tight docs.
There are generally only two things that do not have to be substantiated and they are generally, food and clothing allowance and the gas and transportation. Everything else needs to be fully documented. The experienced negotiator make sure they have a tight knit package and anything out of the norm is fully explained and documented.
2. Painting the Picture: Make sure you show the full picture of the taxpayer’s inability to pay and other factors that may influence the Agent.
One of the things I fully document is what is really going on in the life of the taxpayer that may not be reflected or seen on the financial statement.
If there have been medical events, catastrophes, casualties or other such traumas that existed in the financial life, I place them and document in my package.
The financial statement and its documentation is your canvas to paint the picture of the reality of the financial hardships that go to the life of the person.
Make sure you fully document and have an attached package of all the issues that may be going on in the life of the taxpayer so the taxpayer becomes human to the reviewing agent and the agent is not just looking at a piece of paper.
Let the taxpayer become alive.
3. Tell the whole story: Write and attached letter of the reality of life for the taxpayer.Make the IRS feel the pain.
When an agent who reviews the case looks at the file the first thing they are looking for is the associated documents that IRS requires. The agent gets a feel for the case immediately and sometimes presupposition forms about what they’re already thinking about the case.
I attach a cover letter on the top of the offer and on the back of the offer so the first thing the agent looks at is my cover letter about the reality of this case so I and let the agent know what’s going on in the life of this person.
4. As far as the negotiation goes……….. read more,
When the Internal Revenue Service looks at the 433a OIC, and its associated documentation IRS will apply the strict national, geographical and local standards to the case. One of the things that I try to do is get some other goodies included in the national expenses. Many times taxpayers have other expenses such as having a child that has special needs, may need extra medical help or a plethora of other reasons that do not fall into the normal category of acceptable expenses.
I make sure this reasons are completely documented by doctors notes or any other reasons to support the extra expenses that are reasonable and necessary things taxpayers survive. I have gotten holistic meds included.
More than anything, do not let IRS bully you into accepting the strict national standards. Almost every taxpayer has exceptions to the national standards. Just make sure they’re fully documented.
5. Always use of the appellate function if your case is denied. ALWAYS, better chance of settlement.
You will find that appeals is far more gracious and generous than the local agent.
Any case that’s denied, I automatically appeal. Always!
Many times the appellate agent wants to close their case and is a lot more acceptable to closing the case out if you send in a little more documentation.
You will find the local revenue officer sticking stricter standards than the appellate agent who is much more experienced and a little more looser. If your offer gets denied always go to the appellate function.
6. Getting info back from IRS. When you get the report of the IRS back letting you know the offer was rejected…
This is your time to negotiate. It showtime!
Look at the report, contact the agent and prove there calculations are wrong. How do you do this, by documentation alone.
You must have them rethink there assessment.
Depending on the agent, some are lazy and some intelligent. Documentation is key!
The two areas their assessments will be incorrect are the value of the assets or when IRS considers reasonable and necessary expenses.If it is because of values, provide another set of complimenting value assessment, and if it necessary standards, find their error and document.
7. Other expense rules that may apply.
Other Expenses, In certain circumstances, IRS may allow minimum payments on other expenses, such as student loans, unsecured debts, tuition or contributions if required for employment, etc. Attach a list and explanation.
Expenses not generally allowed:
Generally do not allow tuition for private schools, public or private college expenses, charitable contributions, voluntary retirement contributions or payments on unsecured debts.
However, we may allow the expenses if proven that they are necessary for the health and welfare of the individual or family or the production of income. See Publication 1854 for exceptions.
In closing, always keep in mind the IRS has a plethora of information available to them about the taxpayer. Besides their internal checks, they also use the accurate search engine and credit reports to make sure there is no lies being told on the financial statement.
How To Settle Tax Debt For Pennies on a Dollar, Former IRS Agent, Revenue Officer
by Fresh Start Tax | Jun 23, 2020 | Tax Help
Last year the IRS received over 59,000 offers in compromise, accepted 24,000 plus, & the average settlement was $9500.
Just like everything there is a system, know the system, you can win, not know it, you lose.
I am a former IRS agent and teaching instructor with the IRS, I know the system, you can settle if you met the requirements.
I know my business very well.
As a former IRS agent I accepted and rejected offers in compromise.
Agents who work offers in compromise:
Every IRS agent who works an offer in compromise must have training to understanding everything there is to know about the offer in compromise, what to look for, whose to accept and whose to reject. I taught the class.
I have looked at a myriad of offers in compromise throughout the years. I started working at IRS in 1973 and have been practicing ever since.
What I tell you in this blog is exactly some of the tricks or the so-called “art” of the negotiation.
How IRS Looks at Offers in Compromise:
The Internal Revenue Service does not have to accept offers in compromise and they consider it a gift to the taxpayer to even consider settling for pennies on the dollar. You’ll find many agents have that attitude. Some are a little kinder and others make it a real chore to get your case to the system.
It is much easier for the agent who works the offer to reject the offer then to accept the offer. If the agent rejects offer in compromise, the service simply sends out a form letting you know the reasons for denial, the formulas they used and the reason for rejection. It is cold, hard, and on to the next case.
To accept the offer in compromise means reviews by sometimes three levels within the IRS institution before the offer becomes accepted. Many times the offers have to go the District Counsel, the attorneys of the IRS. Larger cases must be signed off by attorneys.
Why is IRS so strict about the acceptance of the offer in compromise?
The offer in compromise becomes a matter of public record for 18 months at one of six district offices across the United States for the public to review.
That’s right, anybody can go and to one of the six district offices and review any accepted offer in compromise. You think there would be some curiosity seekers about this but the statistic may be a little surprising. Only one person in the last year reviewed offers in compromise throughout the United States.
Internal Revenue Service has set forth certain standards for accepted offers in compromise, and those are not to be broken.
7 Aspects to keep in mind to get an offer i n compromise accepted
1.Documentation is always “king”.
Most offers in compromise do not have sufficient documentation and they are rejected as they goes through the system. The package simply must have air tight docs.
There are generally only two things that do not have to be substantiated and they are generally, food and clothing allowance and the gas and transportation. Everything else needs to be fully documented. The experienced negotiator make sure they have a tight knit package and anything out of the norm is fully explained and documented.
2. Painting the Picture: Make sure you show the full picture of the taxpayer’s inability to pay.
One of the things I fully document is what is really going on in the life of the taxpayer that may not be reflected or seen on the financial statement.
If there have been medical events, catastrophes, casualties or other such traumas that existed in the financial life, I place them and document in my package. The financial statement and its documentation is your canvas to paint the picture of the reality of the financial hardships that go to the life of the person. Make sure you fully document and have an attached package of all the issues that may be going on in the life of the taxpayer so the taxpayer becomes human to the reviewing agent and the agent is not just looking at a piece of paper. Let the taxpayer become alive.
3. Tell the Story: Write and attached letter of the reality of life for the taxpayer.
When an agent who reviews the case looks at the file the first thing they are looking for is the associated documents that IRS requires. The agent gets a feel for the case immediately and sometimes presupposition forms about what they’re already thinking about the case. I attach a cover letter on the top of the offer and on the back of the offer so the first thing the agent looks at is my cover letter about the reality of this case so I and let the agent know what’s going on in the life of this person.
4. As far as the negotiation goes……….. read more,
When the Internal Revenue Service looks at the 433a OIC, and its associated documentation IRS will apply the strict national, geographical and local standards to the case. One of the things that I try to do is get some other goodies included in the national expenses. Many times taxpayers have other expenses such as having a child that has special needs, may need extra medical help or a plethora of other reasons that do not fall into the normal category of acceptable expenses.
I make sure this reasons are completely documented by doctors notes or any other reasons to support the extra expenses that are reasonable and necessary things taxpayers survive. I have gotten holistic meds included.
More than anything, do not let IRS bully you into accepting the strict national standards. Almost every taxpayer has exceptions to the national standards. Just make sure they’re fully documented.
5. Always use of the appellate function if your case is denied.
You will find that appeals is far more gracious and generous than the local agent.
Any case that’s denied, I automatically appeal. Always!
Many times the appellate agent wants to close their case and is a lot more acceptable to closing the case out if you send in a little more documentation.
You will find the local revenue officer sticking stricter standards than the appellate agent who is much more experienced and a little more looser. If your offer gets denied always go to the appellate function.
6.Getting info back from IRS. When you get the report of the IRS back letting you know the offer was rejected…
This is your time to negotiate.
Look at the report, contact the agent and prove there calculations are wrong. How do you do this, by documentation alone.
You must have them rethink there assessment. Depending on the agent, some are lazy and some intelligent. Documentation is key!
The two areas their assessments will be incorrect are the value of the assets or when IRS considers reasonable and necessary expenses.If it is because of values, provide another set of complimenting value assessment, and if it necessary standards, find their error and document.
7. Other expense rules:
Other Expenses, In certain circumstances, IRS may allow minimum payments on other expenses, such as student loans, unsecured debts, tuition or contributions if required for employment, etc. Attach a list and explanation.
Expenses not generally allowed: IRS
Generally do not allow tuition for private schools, public or private college expenses, charitable contributions, voluntary retirement contributions or payments on unsecured debts.
However, we may allow the expenses if proven that they are necessary for the health and welfare of the individual or family or the production of income. See Publication 1854 for exceptions.
Final thought:
Always keep in mind the IRS has a plethora of information available to them about the taxpayer. Besides their internal checks, they also use the accurate search engine and credit reports to make sure there is no lies being told on the financial statement.
Before I go ahead and submit an offer in compromise I spent time doing my due diligence.
Tips Getting the IRS Offer in Compromise Accepted by a Former IRS Agent, Revenue Officer.
by Fresh Start Tax | Jun 23, 2020 | Tax Help
Everyone seems to have some sort of book regarding the “art” of something so I figured there must be an art to negotiating an offer in compromise. I am a former IRS agent and teaching instructor with the IRS. I taught the OIC Program.
I know my business very well.
As a former IRS agent I accepted and rejected offers in compromise.
Every IRS agent who works an offer in compromise must have training to understanding everything there is to know about the offer in compromise, what to look for, whose to accept and whose to reject. I taught the class.
I have looked at a myriad of offers in compromise throughout the years. I started working at IRS in 1973 and have been practicing ever since.
What I tell you in this blog is exactly some of the tricks or the so-called “art” of the negotiation.
The Internal Revenue Service does not have to accept offers in compromise and they consider it a gift to the taxpayer to even consider settling for pennies on the dollar. You’ll find many agents have that attitude. Some are a little kinder and others make it a real chore to get your case to the system.
It is much easier for the agent who works the offer to reject the offer then to accept the offer. If the agent rejects offer in compromise, the service simply sends out a form letting you know the reasons for denial, the formulas they used and the reason for rejection. It is cold, hard, and on to the next case.
To accept the offer in compromise means reviews by sometimes three levels within the IRS institution before the offer becomes accepted. Many times the offers have to go the District Counsel, the attorneys of the IRS. Larger cases must be signed off by attorneys.
Why is IRS so strict about the acceptance of the offer in compromise?
The offer in compromise becomes a matter of public record for 18 months at one of six district offices across the United States for the public to review.
That’s right, anybody can go and to one of the six district offices and review any accepted offer in compromise. You think there would be some curiosity seekers about this but the statistic may be a little surprising. Only one person in the last year reviewed offers in compromise throughout the United States.
Internal Revenue Service has set forth certain standards for accepted offers in compromise, and those are not to be broken.
I will lay out five criteria of what I consider the main art of giving your offer in compromise accepted.
1.Documentation is “king”.
Most offers in compromise do not have sufficient documentation and they are rejected as they goes through the system. The package simply must have air tight docs.
There are generally only two things that do not have to be substantiated and they are generally, food and clothing allowance and the gas and transportation. Everything else needs to be fully documented. The experienced negotiator make sure they have a tight knit package and anything out of the norm is fully explained and documented.
2. Make sure you show the full picture of the taxpayer’s inability to pay.
One of the things I fully document is what is really going on in the life of the taxpayer that may not be reflected or seen on the financial statement.
If there have been medical events, catastrophes, casualties or other such traumas that existed in the financial life, I place them and document in my package. The financial statement and its documentation is your canvas to paint the picture of the reality of the financial hardships that go to the life of the person. Make sure you fully document and have an attached package of all the issues that may be going on in the life of the taxpayer so the taxpayer becomes human to the reviewing agent and the agent is not just looking at a piece of paper. Let the taxpayer become alive.
3. Write and attached letter of the reality of life for the taxpayer.
When an agent who reviews the case looks at the file the first thing they are looking for is the associated documents that IRS requires. The agent gets a feel for the case immediately and sometimes presupposition forms about what they’re already thinking about the case. I attach a cover letter on the top of the offer and on the back of the offer so the first thing the agent looks at is my cover letter about the reality of this case so I and let the agent know what’s going on in the life of this person.
4. As far as the negotiation goes………..
When the Internal Revenue Service looks at the 433a OIC, and its associated documentation IRS will apply the strict national, geographical and local standards to the case. One of the things that I try to do is get some other goodies included in the national expenses. Many times taxpayers have other expenses such as having a child that has special needs, may need extra medical help or a plethora of other reasons that do not fall into the normal category of acceptable expenses. I make sure this reasons are completely documented by doctors notes or any other reasons to support the extra expenses that are reasonable and necessary things taxpayers survive. I have gotten holistic meds included.
More than anything, do not let IRS bully you into accepting the strict national standards. Almost every taxpayer has exceptions to the national standards. Just make sure they’re fully documented.
5. The use of the appellate function if your case is denied.
You will find that appeals is far more gracious and generous than the local agent.
Any case that’s denied I automatically appeal.
Many times the appellate agent wants to close their case and is a lot more acceptable to closing the case out if you send in a little more documentation. You will find the local revenue officer sticking stricter standards than the appellate agent who is much more experienced and a little more looser. If your offer gets denied always go to the appellate function.
6.When you get the report of the IRS back letting you know the offer was rejected…
This is your time to negotiate.
Look at the report, contact the agent and prove there calculations are wrong. How do you do this, by documentation alone.
You must have them rethink there assessment. Depending on the agent, some are lazy and some intelligent. Documentation is key!
The two areas their assessments will be incorrect are the value of the assets or when IRS considers reasonable and necessary expenses.If it is because of values, provide another set of complimenting value assessment, and if it necessary standards, find their error and document.
7. AS FAR OTHER EXPENSES, PLEASE NOTE
Other Expenses, In certain circumstances, IRS may allow minimum payments on other expenses, such as student loans, unsecured debts, tuition or contributions if required for employment, etc. Attach a list and explanation.
LASTLY.
Always keep in mind the IRS has a plethora of information available to them about the taxpayer. Besides their internal checks, they also use the accurate search engine and credit reports to make sure there is no lies being told on the financial statement.
Before I go ahead and submit an offer in compromise I spent time doing my due diligence.
Have questions, i am available, 954-328-3501
by Fresh Start Tax | Jun 22, 2020 | Tax Help
I am a former IRS Agent and I am an affordable expert in the Offer in Compromise. Few people in the Country can claim to be a True Specialist. I worked the OIC Program at IRS.
As a Former IRS Agent Revenue Officer, I accepted and rejected Offer in Compromise. I know the system and know how to get offers in compromise accepted if your are a suitable candidate for the Offer in Compromise.
Not all revenue officers agents work the offer in compromise program because of certain skills, experience and expertise. Before you become a RO who can work the program, you must go through a class, I taught that class.
The IRS Offer in Compromise Program, Learn the Top Tips.
1. Most people do not know there is a pre-qualifer tool. Use it.
You can find the pre- qualifer tool on our website site or find it on the government website. Before you give your money to any company who claims they can settle your debt for pennies on the dollar, you best fill out the IRS pre-qualifier tool or call and experience firm to review your case to make sure you are in fact qualified.
One call to us and you can find out within 5 minutes if you can settle your tax debt through the OIC program.
2. How long does it take for professional to let you know your qualified to have your Offer in Compromise accepted by the Internal Revenue Service?
An experienced IRS tax professional can let you know within about a minute whether you are qualified to settle your tax debt for pennies on a dollar. By the time the person reviews the last page they will almost instantaneously let you know where you stand.
3. What is a very important element of getting your offer in compromise accepted?
Your documented financial statement is the absolute key to getting your offer in compromise accepted.
That is the tool that the Internal Revenue Service uses to accept or deny your offer in compromise. It takes a skilled tax professional to make sure it is completed with all the proper documentation. Documentation is king!
4. What documentation will IRS need to settle your IRS Tax Debt?
When you fill out the IRS financial statement, IRS will need complete documentation for any dollar number that is placed on the financial statement. IRS will also need at least six month worth of bank statements, pay stubs and anything relative to any number that is on that form.
That form must be completely documented. Everything must match up. IRS will be looking for inconsistencies on things that are not matching up on the financial statement and documentation.
As an example, does your tax return, much up to your cost of living, your bank statements, your tax return,and your bank statements. The Agents wil look closely at these types of things.
A bonus tax tip!
If you have had other back financial issues this is the time to let the IRS know, bring up all the financial problems you have had to let them know things are not roses. IRS will not know unless you tell them.
5. How does IRS know your telling the truth and my financial statement?
The Internal Revenue Service has many search engines to use to find out all about you. The Internal Revenue Service uses internal search engines as well as external searches to find out about you. IRS will use the Accuriant search engine as well as credit bureaus. These search engines will help IRS verify your financial statement.
On larger cases IRS or use much more due diligence than on smaller cases.
6. Is there a specific formula that IRS uses to accept the offer in compromise?
Absolutely, there is a very simple formula to get your offer in compromise accepted.
IRS wants the sum total of your assets and they want to know what the value of your income and expenses.
You must understand this formula.
IRS will look at all your assets and find out what the fair market value of those assets are. Real estate will be discounted by 20%. IRS will use that as a base amount to compute the asset part of what is needed for case settlement.
IRS will look at your income and expenses and make sure you fit within the national standards.
As you complete the 433oic IRS will apply the national standards expenses against your income. If there is a surplus and as an example I will use $500, IRS will take that $500 and multiply it by the life of the statute.
IRS will add the fair market value of your assets plus the value of your income and add them together. That will be the base amount for the IRS to accept the offer in compromise.
7. What is another important factor for getting your offer in compromise accepted?
I cannot tell you how important timing is.
It is best to make sure you’re not in the high season of income. It is best to file an offer in compromise when you are doing the worst.
As an example, if you are real estate salesman and you have just earned a $40,000 commission and you want to file for an offer in compromise you have jeopardized your offer because you’ve just made a large amount of money and that new income you received is going to jack up your average income for settlement.
Therefore, understanding where your income and expenses are will determine the best time to file the offer in compromise. The offer in compromise requires a great deal of planning on when the best time to file.
8. How long does an offer to compromise take to process before it can get accepted?
You must relax, it take a long time.
Currently the offer in compromise takes about nine months to process.
You will first receive a letter that they have received your offer and then you must wait to the offer is assigned and sent to a particular offer specialist to work your case. It is best to make sure your offer in compromise is fully documented when sending so they don’t have to send it back because if they do you you may have to start the clock all over again.
9. Another very important factor to keep in mind before IRS will ever the Offer in Compromise.
Before you send in your offer, you must’ve filed all current tax returns.
The first thing that IRS will do is pull up a summary of your case history and all tax returns must be filed or IRS will send the case back.
Also you must be current on withholding or estimate payments or IRS will immediately reject the offer in compromise because you are not current and up-to-date. Do not overlook this is a sure way to get your offer sent back to you.
10. Did you Know ? Accepted Offers in Compromise are a matter of Public Records!
Yes, the reason IRS is so picky about offers in compromise is because they are a matter of public record.
That’s right, for 18 months after your offer in compromise is accepted your file goes to one of six regional tax sites for public review.
Don’t be too afraid this, last year only one person inspected the files, so don’t worry are safe.
The Offer in Compromise is an art. Small cases can be done by DYI, but any case of substance need a true tax professional.
The IRS Offer in Compromise, Learn How to Get Your Offer in Compromise Accepted, I am a Former IRS Agent.
