by Fresh Start Tax | Sep 16, 2013 | Tax Help
Make Arrangements with the IRS
If you need to make arrangements with the Internal Revenue Service it is in your best interest to consider using former IRS agents who know the systems, the protocol and all the available different arrangements that can be made with the Internal Revenue Service.
Our firm has over 60 years of working directly for the Internal Revenue Service in the local, district and regional tax offices of the Internal Revenue Service. We’ve also been in management, supervisory and teaching positions and therefore are aware of all IRS programming and the best way to achieve results.
Besides having former IRS agents on staff we are also comprised of tax attorneys and certified public accountants for more complicated cases.
When you know the system and a person’s financial condition it is easy to fit them in a program/arrangement that makes sense both to the Internal Revenue Service and to the client.
When making an arrangement with the Internal Revenue Service it’s always prudent to review the person’s financial condition and to find out just where they are financially before entering into any agreement/arrangement with the Internal Revenue Service.
Making payment arrangements with the Internal Revenue Service to pay your tax may not be your very best option.
The Internal Revenue Service has two other programs that are available to taxpayers and it is often best to find out if they fit in one of the two other categories before you go rushing off making a payment agreement with the Internal Revenue Service. Wouldn’t it be great if you can just settle your case permanently.
Many taxpayers wish to make these payments or arrangements with the Internal Revenue Service but at the current time can qualify for a current economic tax hardship.
The Internal Revenue Service can place your case into a currently not collectible file due to a lack of income and high expenses.
This can allow for breathing room for the taxpayer and not be strapped by a payment they really cannot afford to make. IRS does not publicize this program very much but it is called currently non-collectible status. The Internal Revenue Service will need a current financial statement fully documented to qualify for this arrangement with the Internal Revenue Service. That financial statement must be put on a form 433-F.
You may also qualify to settle your tax debt by filing an offer in compromise with the Internal Revenue Service.
38% of all individuals who file an offer in compromise get accepted. Is important to know that not everyone qualifies for an offer in compromise so we will carefully review your case to make sure that your offer in compromise as a true chance of acceptance. You must be careful not to be ripped off by other Internet firms claiming that they can settle your debt for pennies on a dollar. While it is possible you must use extreme caution to make sure you do qualify. You will find on our site a pre-qualifier tool for the OIC that you can walk through by yourself to make sure you have a good fighting chance of getting your offer accepted.
Everything depends on the person’s current financial statement and financial goals.
It is best to contact us and let us fully review your financial situation and find out your endgame strategy before rushing off and making any arrangement with the Internal Revenue Service.
So to be clear, the three possible alternatives exist when you make a closing arrangement with the Internal Revenue Service .
After your financial statement is reviewed your case one will be closed by the IRS with either a:
1. economic tax hardship,
2. you may be a qualified candidate for offer in compromise, or
3. you can start making monthly payments.
Below you will find out about the monthly payment program from the Internal Revenue Service.
Monthly payments through an installment agreement
You can make monthly payments through an installment agreement if you’re not financially able to pay your tax debt immediately.
However, you will reduce or eliminate the amount of penalties and interest you pay and avoid the fee associated with setting up an installment agreement if you pay your tax bill in full.
Before you apply you need too:
- File all required tax returns;
- Consider other sources (loan or credit card) to pay your tax debt in full to save money;
- Determine the largest monthly payment you can make ($25 minimum); and
- Know that your future refunds will be applied to your tax debt until it is paid in full.
Fees for setting up an installment agreement arrangement:
1. $52 for a direct debit agreement;
2. $105 for a standard agreement or payroll deduction agreement; or
3. $43 if your income is below a certain level.
To apply for an installment arrangement agreement
Fresh Start Tax LLC can apply online if you owe $50,000 or less in combined individual income tax, penalties and interest; OR
If you owe more than $50,000, you will also need to complete Form 433-F, Collection Information Statement (PDF).
We will then call the Internal Revenue Service with the detailed information on your financial statement and find an arrangement with the Internal Revenue Service that works for you.
Everything will be based on your financial statement and IRS will make determinations based on your income and your current living expenses. You will need to be familiar with the national standards tests (chart ) that IRS uses on all cases.
You can find the chart on our website called the national standards. IRS will apply your income against the national standards to make sure you’re living within your means
Understand your agreement arrangement, avoid default of payments
To keep your account in good standing with the IRS. You should:
- Pay at least your minimum monthly payment when it’s due (direct debit or payroll deductions make this easy);
- Include your name, address, SSN, daytime phone number, tax year and return type on your payment;
- File all required tax returns on time;
- Pay all taxes you owe in full and on time (contact us to change your existing agreement if you cannot);
- Continue to make all scheduled payments even if we apply your refund to your account balance; and
- Ensure your statement is sent to the correct address, contact us if you move or complete and mail Form 8822, Change of Address (PDF).
- If you don’t receive your statement, send your payment to the address listed in your agreement.
There may be a reinstatement fee if your agreement goes into default. Penalties and interest continue to accrue until your balance is paid in full. If you are in danger of defaulting on your payment agreement for any reason, contact the IRS immediately.
Contact us today to learn more about making arrangements with the Internal Revenue Service. You can call us for a free initial tax consultation and speak directly to a true tax professional.
by Fresh Start Tax | Sep 13, 2013 | Offer in Compromise, Tax Help
We are true tax experts for the IRS offer in Compromise. As a Former Agent, I worked the offer program for the IRS.
There are ads all over the television and the Internet is draped with splash ads and companies advertising you can settle your tax debt for pennies on the dollar through the IRS offer in compromise program.
The fact of the matter that’s true however I would make sure you fill out the IRS qualifier or tool before filing an offer in compromise.
Take my word on this I am a former IRS agent in teaching instructor who taught the offer in compromise program while at the Internal Revenue Service. I am a tax expert in the offer in compromise.
You can contact us today for a free initial consultation and we can walk you through the offer in compromise program at the Internal Revenue Service.
The Internal Revenue Service receives about 60,000 offers in compromise each year and accepts about 38% of those filed.
Most of those offers and compromises that are accepted are filed by professional firms that have on staff tax attorneys, tax lawyers, certified public accountants, enrolled agents or former IRS agents.
Before we tell you everything you need to know please understand that I would not contemplate filing an offer in compromise on your own because of the very specific standards that IRS uses to qualify a taxpayer for an offer in compromise. The average Internal Revenue Service agent probably spends about 20 hours investigating every offer in compromise and the IRS have very tight financials formulas and acceptance standards for the OIC.
The offer in compromise is not for everybody.
The IRS Pre-qualifier tool for the IRS Offer in Compromise
You should also know that there is a pre-qualifier tool that is available to you.
You can find on our website and any taxpayer/ client can walk through to find out if they are a qualified candidate for the offer in compromise or tax settlement program.
No offer in compromise should be filed unless the individual has walked through the pre-qualifier tool to make sure they have a solid chance of getting their offer in compromise accepted. If you qualify through the IRS pre-qualifier tool for the offer in compromise you have an excellent chance of getting your offer in compromise accepted by the Internal Revenue Service.
You will find below all the questions that are asked on the pre-qualifier tool and the financial statement that is required to be turned into Internal Revenue Service for the offer in compromise program.
The pre-qualifier tool is used by Internal Revenue Service to make sure taxpayers understand the offer in compromise program.
Below you will find out the questions that are asked on the pre-qualifier tool.
So be apprised, these are the questions you will to be asked by the Internal Revenue Service for your offer in compromise.
Also it should be noted that this tool is used by the IRS collection division anytime you owe the IRS money on back taxes.
The questions asked on the Pre-qualifier Tool
This tool should only be used as a guide. The reason that I say that this should be used as a guide is simple.
Sometimes there are very unique circumstances that shape a particular offer in compromise and sometimes IRS is willing to settle for less if the theory of the effective tax administration comes in the play.
Preliminary Questions that are asked :
Before IRS can proceed to accept your offer in compromise you must answer yes to these questions:
1. Are you in an open bankruptcy proceeding?
2. Have you filed all required federal tax returns?
3. Have you made all required estimated tax payments?
4. If you are self-employed and have employees, have you submitted all required federal
tax deposits?
If you answer NO to these questions IRS has the right to stop the offer in compromise and rejected immediately. In nine times out of 10 you can bet they will stop the offer in compromise because they are too lazy to work the case.
IRS cannot work your offer in compromise if you were are in an open bankruptcy proceeding and they can choose to reject your offer if you have not filed all your federal income tax returns and are not current in the year you are filing the offer. Being current simply means you have made all required estimated tax payments or you have the proper amount of withholding being taken out of your payroll check to cover your taxes.
I hate to say this but, as a general rule on IRS will look to reject any offer in compromise before they accept it because of the sheer amount of work it takes for a person to get an offer in compromise accepted.
It must be signed off by their manager, by the regional manager in the district Council of the Internal Revenue Service. The reason these cases are reviewed so much is because of the simply fact they are open for public expect inspection for one year at the district office.
As a former IRS agent I can tell you it’s a lot easier to find reasons to reject the OIC than to bring them to managers to have them accepted, sad but true.
The IRS is only interested in two assets to settle your case with an offer in compromise and they are:
1. Your income,
2. Your assets.
General Information the IRS will want to acquire. The income and expense side.
The Internal Revenue Service will only allow certain necessary living expenses and those only.
They will plug your expenses against the national, regional, and geographical expense standards and allow you the “average monthly expenses”.
IRS will only accept reasonable expenses to make sure you’re living within your means therefore in every area in the United States the Department of Labor have come out with statistics to show what average reasonable expenses .
IRS will expect you fall within those means.
The Internal Revenue Service will disallow the expenses over above the standard. The sum total of the expenses over the standard are thus multiplied by 12 and become part of the income side of the offer in compromise.
Information relative to the National Standards
Collection Financial Standards are used to help determine a taxpayer’s ability to pay a delinquent tax liability.
Allowable living expenses include those expenses that meet the necessary expense test. The necessary expense test is defined as expenses that are necessary to provide for a taxpayer’s (and his or her family’s) health and welfare and/or production of income.
National Standards for food, clothing and other items apply nationwide. Taxpayers are allowed the total National Standards amount for their family size, without questioning the amount actually spent.
National Standards have also been established for minimum allowances for out-of-pocket health care expenses. Taxpayers and their dependents are allowed the standard amount on a per person basis, without questioning the amount actually spent.
maximum allowances for housing and utilities and transportation, known as the Local Standards, vary by location. In most cases, the taxpayer is allowed the amount actually spent, or the local standard, whichever is less.
Generally, the total number of persons allowed for necessary living expenses should be the same as those allowed as exemptions on the taxpayer’s most recent year income tax return.
If the IRS determines that the facts and circumstances of a taxpayer’s situation indicate that using the standards is inadequate to provide for basic living expenses, we may allow for actual expenses. However, taxpayers must provide documentation that supports a determination that using national and local expense standards leaves them an inadequate means of providing for basic living expenses.
As far as the asset side
As far as the asset side is considered IRS wants 100% of the total liquidation value of all your assets. You will find out below what list of assets IRS will consider.
Information required by the Pre-Qualifier Tool
IRS will want you to enter information about your location, household and tax debt. They will want to know your:
1. ZIP or postal code
2. State
3. County
4. Total members of household
5. Total members of household 65 years or older.
The IRS wants this information to apply the national standards for expenses in the area and the location you have plus the number of exemptions.
Total IRS tax debt (whole dollars)
1. What is the most recent tax year you are requesting to compromise?
Your Assets – These are the assets IRS will be inquiring about.
The Internal Revenue Service will require all liquidation values to be part of your offer. If you add up the following liquidation values on the below assets IRS will accept nothing less.
Total bank balances (checking, savings, money market, CDs, etc.)
Home market value
Home loan balance
Vehicles
All Retirement account equity (401k, IRA, etc.)
Other real property (rental, business, land, timeshare, etc.)
Other asset equity (airplane, motorcycle, recreational vehicle, etc.)
Stocks, bonds and other investments
Miscellaneous (art, coin and gun collections, etc.)
Information about your monthly household income.
The Internal Revenue Service will use the accurate/LEXIS-NEXIS and Google search engines to inquire about you and your assets.
Make sure you turn in an accurate and complete financial statement.
IRS will want proof of:
a. Gross wages
b. Interest and dividends
c. Distributions from partnerships, sub-S corporations, etc.
d. Net rental income
e. Net business income
f. Child support received
g. Alimony received
h. Rent or mortgage and utilities
i. Vehicle 1 loan or lease payment
j. Vehicle operating costs (gas, repairs, etc.)
k. Total vehicles owned
l. Public transportation costs
m. Health insurance premiums
n. Federal, state and local taxes (Enter a 0 if no taxes)
o. Court-ordered payments (child support, alimony, etc.)
p. Child dependent care costs
q. Life insurance premiums and cash surrender values
Selecting a payment option
Your initial payment will vary based on your offer and the payment option you choose:
Lump Sum Cash: Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.
Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.
Downside to Submitting an OIC, yes there is a downside.
Completing the forms is just the beginning. After you submit the forms, the IRS will ask you for rafts of financial documentation — pay stubs, bank records, vehicle registrations, and myriad other items.
This is an exhaustive, time-consuming process on the part of the Agent.
Some taxpayers wind up submitting files upon files of documents to the IRS to support their OIC request. If your OIC is rejected, the disclosures you made about your assets give the IRS all the information it needs to accelerate its collection efforts against you. It gives the Internal Revenue Service or road map to collect your money.
For this reason, it makes sense not to submit an offer unless it is likely to be accepted. That is why going through the pre-qualifier tool on our website to help assure you have a more likely chance of acceptance.
Remember that interest keeps accruing during the offer in compromise negotiation process, meaning you’ll end up owing more than ever if you cannot make a deal.
Contact us today to learn more about the filing of an offer in compromise. When dealing with our firm you will be talking to a tax attorney, tax lawyer, certified public accountant or former IRS agent, manager tax instructor.
Free consultations are available upon request.
You can also go to the IRS website@IRS.gov to fill out the pre-qualifier.
Remember if you are in a higher tax firm make sure you check on their Better Business Bureau rating, their fees and costs, and asked to speak to the person directly that will be handling your case.
by Fresh Start Tax | Sep 13, 2013 | Offer in Compromise
The Internal Revenue Service receives about 60,000 offers in compromise each year and accepts about 38% of those filed.
Most of those offers and compromises that are accepted are filed by professional firms that have on staff tax attorneys, tax lawyers, certified public accountants, enrolled agents or former IRS agents.
Before we tell you everything you need to know please understand that I would not contemplate filing an offer in compromise on your own because of the very specific standards that IRS uses to qualify a taxpayer for an offer in compromise. The average Internal Revenue Service agent probably spends about 20 hours investigating every offer in compromise and the IRS have very tight financials formulas and acceptance standards for the OIC.
The offer in compromise is not for everybody.
I should know I am a former IRS revenue officer, teaching instructor and an expert in the IRS tax debt settlement program called the offer in compromise.
Pre-qualifier tool
You should also know that there is a pre-qualifier tool that is available to you. You can find on our website and any taxpayer/ client can walk through to find out if they are a qualified candidate for the offer in compromise or tax settlement program.
No offer in compromise should be filed unless the individual has walked through the pre-qualifier tool to make sure they have a solid chance of getting their offer in compromise accepted.
You will find below all the questions that are asked on the pre-qualifier tool and the financial statement that is required to be turned into Internal Revenue Service for the offer in compromise program.
The IRS Pre Qualifier Tool
The pre- qualifier tool is used by Internal Revenue Service to make sure taxpayers understand the offer in compromise program.
Due to the Internet being loaded with companies and individuals stating they can settle their case for pennies on a dollar the Internal Revenue Service is trying to make the public aware that they can find out for themselves whether they qualify for this program. If you call our office we can walk through the program with you in about five minutes and let you know whether you are qualified
Below you will find out the questions that are asked on the pre-qualifier tool.
So be apprised, these are the questions you were to be asked by the Internal Revenue Service for your offer in compromise. Also it should be noted that this tool is used by the IRS collection division anytime you owe the IRS money.
The questions asked on the Pre-qualifier Tool
This tool should only be used as a guide. the reason that I say that this should be used as a guide is simple. Sometimes there are unique circumstances that shape a particular offer in compromise and sometimes IRS is willing to settle for less if the theory of the effective tax administration comes in the play.
Preliminary Questions that are asked :
Before IRS can proceed to accept your offer in compromise you must answer yes to these questions:
1. Are you in an open bankruptcy proceeding?
2. Have you filed all required federal tax returns?
3. Have you made all required estimated tax payments?
4. If you are self-employed and have employees, have you submitted all required federal
tax deposits?
If you answer no to these questions IRS has the right to stop the offer in compromise and rejected immediately.
IRS cannot work your offer in compromise if you were are in an open bankruptcy proceeding and they can choose to reject your offer if you have not filed all your federal income tax returns and are not current in the year you are filing the offer. Being current simply means you have made all required estimated tax payments or you have the proper amount of withholding being taken out of your payroll check to cover your taxes.
I hate to say this but, as a general rule on IRS will look to reject any offer in compromise before they accept it because of the sheer amount of work it takes for a person to get an offer in compromise accepted. It must be signed off by their manager, by the regional manager in the district Council of the Internal Revenue Service
As a former IRS agent I can tell you it’s a lot easier to find reasons to reject the the OIC than to bring them to managers to have them accepted, sad but true.
The IRS is only interested in two assets to settle your case with an offer in compromise and they are:
1. Your income,
2. Your assets.
General Information the IRS will want to acquire. The income and expense side.
The Internal Revenue Service will only allow certain necessary living expenses and those only.
They will plug your expenses against the national, regional, and geographical expense standards and allow you the “average monthly expenses”.
IRS will only accept reasonable expenses to make sure you’re living within your means therefore in every area in the United States the Department of Labor have come out with statistics to show what average reasonable expenses .
IRS will expect you fall within those means.
The Internal Revenue Service will disallow the expenses over above the standard. The sum total of the expenses over the standard are thus multiplied by 12 and become part of the income side of the offer in compromise.
Information relative to the National Standards
Collection Financial Standards are used to help determine a taxpayer’s ability to pay a delinquent tax liability.
Allowable living expenses include those expenses that meet the necessary expense test. The necessary expense test is defined as expenses that are necessary to provide for a taxpayer’s (and his or her family’s) health and welfare and/or production of income.
National Standards for food, clothing and other items apply nationwide. Taxpayers are allowed the total National Standards amount for their family size, without questioning the amount actually spent.
National Standards have also been established for minimum allowances for out-of-pocket health care expenses. Taxpayers and their dependents are allowed the standard amount on a per person basis, without questioning the amount actually spent.
Maximum allowances for housing and utilities and transportation, known as the Local Standards, vary by location. In most cases, the taxpayer is allowed the amount actually spent, or the local standard, whichever is less.
Generally, the total number of persons allowed for necessary living expenses should be the same as those allowed as exemptions on the taxpayer’s most recent year income tax return.
If the IRS determines that the facts and circumstances of a taxpayer’s situation indicate that using the standards is inadequate to provide for basic living expenses, we may allow for actual expenses. However, taxpayers must provide documentation that supports a determination that using national and local expense standards leaves them an inadequate means of providing for basic living expenses.
As far as the asset side
As far as the asset side is considered IRS wants 100% of the total liquidation value of all your assets. You will find out below what list of assets IRS will consider.
Information required by the Pre-Qualifier Tool
IRS will want you to enter information about your location, household and tax debt. They will want to know your:
1. ZIP or postal code
2. State
3. County
4 .Total members of household
5. Total members of household 65 years or older.
The IRS wants this information to apply the national standards for expenses in the area and the location you have plus the number of exemptions.
Total IRS tax debt (whole dollars)
1. What is the most recent tax year you are requesting to compromise?
Your Assets – These are the assets IRS will be inquiring about.
The Internal Revenue Service will require all liquidation values to be part of your offer. If you add up the following liquidation values on the below assets IRS will accept nothing less.
Total bank balances (checking, savings, money market, CDs, etc.)
Home market value
Home loan balance
Vehicle 1 equity
Vehicle 2 equity
Retirement account equity (401k, IRA, etc.)
Other real property (rental, business, land, timeshare, etc.)
Other asset equity (airplane, motorcycle, recreational vehicle, etc.)
Stocks, bonds and other investments
Miscellaneous (art, coin and gun collections, etc.)
Information about your monthly household income.
a. Gross wages
b. Interest and dividends
c. Distributions from partnerships, sub-S corporations, etc.
d. Net rental income
e. Net business income
f. Child support received
g. Alimony received
h. Rent or mortgage and utilities
i. Vehicle 1 loan or lease payment
j. Vehicle operating costs (gas, repairs, etc.)
k. Total vehicles owned
l.Public transportation costs
m.Health insurance premiums
n. Federal, state and local taxes (Enter a 0 if no taxes)
o.Court-ordered payments (child support, alimony, etc.)
p. Child dependent care costs
q. Life insurance premiums
Select a payment option
Your initial payment will vary based on your offer and the payment option you choose:
Lump Sum Cash: Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.
Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.
Downside to Submitting an OIC
Completing the forms is just the beginning. After you submit the forms, the IRS will ask you for rafts of financial documentation — pay stubs, bank records, vehicle registrations, and myriad other items.
This is an exhaustive, time-consuming process on the part of the Agent.
Some taxpayers wind up submitting files upon files of documents to the IRS to support their OIC request.
Another drawback.
If your OIC is rejected, the disclosures you made about your assets give the IRS all the information it needs to accelerate its collection efforts against you.
For this reason, it makes sense not to submit an offer unless it is likely to be accepted. That is why going through the pre-qualifier tool on our website to help assure you have a more likely chance of acceptance.
Remember that interest keeps accruing during the offer in compromise negotiation process, meaning you’ll end up owing more than ever if you cannot make a deal.
Contact us today to learn more about the filing of an offer in compromise. When dealing with our firm you will be talking to a tax attorney, tax lawyer, certified public accountant or former IRS agent, manager tax instructor.
Free consultations are available upon request.
Offer in Compromise = Everything you need to Know = Former IRS Debt Settlement Officer
by Fresh Start Tax | Sep 13, 2013 | Tax Help
Settle your Tax Debt for Pennies on a Dollar
You should know that it is very possible to settle your tax debt for pennies on a dollar but you must qualify for the tax debt settlement program called the offer in compromise.
The IRS statistics for this past year has shown that 38% of all offers in compromise/ tax debt settlement filed with the Internal Revenue Service are excepted.
Most of the offers in compromise that are not accepted never should’ve been filed or were not filed by qualified professionals. It is critical you know the program before you make an attempt to settle your tax debt.
IRS receives around 48,000 offers in compromise per year. From what I’ve been told by IRS agents who have worked the offer compromise tax settlement program this year, that the average settlement is $.14 on the dollar. That is a statistical average.
Every case that is worked by the IRS is based on its own merit and its own set of facts.
Not everybody is a qualified candidate for a tax debt settlement program.
You can settle your tax debt for pennies on a dollar but you must meet very specific criteria.
I should know.
I am the former IRS agent in teaching instructor and taught the IRS offer in compromise program while employed by the Internal Revenue Service.
There are strict standards to get your offer in compromise accepted by the Internal Revenue Service to settle your tax debt.
Before you go running off paying a tax firm or Internet company to settle your debt for pennies on a dollar you must be completely aware of the standard that IRS has for settlement. Call us today for no cost and we will review your specific situation.
The standard for acceptance of a tax debt settlement
The standard for acceptance is simply this, you must give IRS the total value of all your assets plus the Internal Revenue Service will compare your monthly income and expenses against the regional, national income and expense standards.
If there is any money left over at the end of the month they use a 12 multiplier. IRS simply adds up the total value of all your assets plus the 12 multiplier figure and that is the sum total of your offer in compromise.
The Internal Revenue Service will not accept anything less. That is why timing is important before filing an offer in compromise to settle your tax debt. You want to know the positives and the negatives about your case.
To make sure taxpayers know about offers in compromise or the tax debt settlement program IRS last year came out with the pre-qualifier tool so taxpayers do not get ripped off by Internet companies who claim everybody can settle their case for pennies on the dollar.
You will find that the IRS has a pre-qualifier tool and you can find on our website.
You can contact us today to find out if you qualify for an offer in compromise. We will not take any money on any client unless we feel they are qualified to file an offer in compromise. We can usually make that determination within a five-minute period time.
Before you choose a firm to settle your IRS tax debt make sure you check the Better Business Bureau rating, ask to speak directly to the person working your case, and make sure they have qualified tax professionals on staff. Also you should ask them based on a similar set of facts what results were received or gotten.
I would make sure on staff you will find either a tax attorney, certified public accountant, enrolled agent, or former IRS agent that you can speak directly to. Most firms employ sales closers to qualify taxpayers to make sure they can pay the company before they even file the offer.
The reality should be that they carefully review your case and let you know your chances of success. Do not get sucked up into a company that will not review your financial statement first and let you know your chances of success.
The IRS Offer in Compromise/ Settle your Tax Debt
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship.
The IRS will consider your unique set of facts and circumstances and everyone’s case is different. IRS will take into account your:
1. Ability to pay;
2. Income;
3. Expenses; and
4. Asset equity.
The IRS generally approve an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time.
The IRS will explore all other payment options before submitting an offer in compromise. The Offer in Compromise program is not for everyone.
If you hire a tax professional to help you file an offer, be sure to check his or her qualifications.
Make sure you are eligible to settle your tax debt
Before the IRS can consider your offer, you must be current with all filing and payment requirements. You are not eligible if you are in an open bankruptcy proceeding.
Submitting your offer Tax Debt Settlement Offer to the Internal Revenue Service
Your completed offer in compromise tax debt settlement package will include:
1. Form 433-A (OIC) (individuals) or
2. 433-B (OIC) (businesses) and all required documentation as specified on the forms;
Form 656(s) – individual and business tax debt(Corporation/ LLC/ Partnership) must be submitted on separate Form 656;
3. $150 application fee (non-refundable); and
4. Initial payment (non-refundable) for each Form 656.
Selecting a payment option for the IRS to settle your tax debt
Your initial payment will vary based on your offer and the payment option you choose:
- Lump Sum Cash: Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.
- Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.
If you meet the Low Income Certification guidelines, you do not have to send the application fee or the initial payment and you will not need to make monthly installments during the evaluation of your offer.
Understanding the process to Settle your tax debt with a offer in compromise
While your offer in compromise is being evaluated:
Your non-refundable payments and fees will be applied to the tax liability (you may designate payments to a specific tax year and tax debt);
- A Notice of Federal Tax Lien may be filed;
- Other collection activities are suspended;
- The legal assessment and collection period is extended;
- Make all required payments associated with your offer;
- You are not required to make payments on an existing installment agreement; and
- Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.
Contact us today for free initial tax consultation and find out whether you are a qualified candidate for the IRS offer in compromise program otherwise known as IRS settlements.
We have over 60 years of direct work experience with the Internal Revenue Service in the local, district, and regional tax offices of the IRS.
We are a Florida tax from practicing in the state since 1982.
On staff is a former IRS settlement officer who not only worked the IRS offer in compromise program but also for taught the program to new IRS agents.
Settle your Tax Debt – Pennies on a Dollar – Former IRS Settlement Officer
by Fresh Start Tax | Sep 13, 2013 | Offer in Compromise, Tax Settlements
How to Settle your Tax Debt – Pennies on a Dollar – Former IRS Settlement Officer
Let me first say that you can settle your tax debt for pennies on the dollar if you qualify and meet the standards for offer in compromise program.
The statistics for this past year has shown that 38% of all offers in compromise filed with the Internal Revenue Service are excepted.
IRS receives around 50,000 offers in compromise per year. From what I’ve been told by IRS agents who have worked the offer compromise tax settlement program this year, that the average settlement is $.14 on the dollar.
Not everybody is a qualified candidate for a tax Settlement.
You can settle your tax debt for pennies on a dollar but you must meet very specific criteria. The offer program and settling your tax debt program is not for everyone.
I should know. I am the former IRS agent in teaching instructor and taught the IRS offer in compromise program while employed by the Internal Revenue Service.
There are strict standards to get your offer in compromise accepted by the Internal Revenue Service to settle your tax debt.
Before you go running off paying a tax firm or Internet company to settle your debt for pennies on a dollar you must be completely aware of the standard that IRS has for settlement.
The standard for acceptance is simply this, you must give IRS the total value of all your assets plus the Internal Revenue Service will compare your monthly income and expenses against the regional, national income and expense standards. If there is any money left over at the end of the month they use a 12 multiplier. IRS simply adds up the total value of all your assets plus the 12 multiplier figure and that is the sum total of your offer in compromise.
The Internal Revenue Service will not accept anything less.
You will find that the IRS has a pre-qualifier tool and you can find on our website.
You can contact us today to find out if you qualify for an offer in compromise. We will not take any money on any client unless we feel they are qualified to file an offer in compromise.
Before you choose a firm to settle your IRS tax debt make sure you check the Better Business Bureau rating, ask to speak directly to the person working your case, and make sure they have qualified tax professionals on staff.
I would make sure on staff you will find either a tax attorney, certified public accountant, enrolled agent, or former IRS agent that you can speak directly to.
Do not just give all your information to a sales agent which most firms employ.
The IRS Offer in Compromise/ Settle your Tax Debt
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship.
The IRS will consider your unique set of facts and circumstances:
1. Ability to pay;
2. Income;
3. Expenses; and
4. Asset equity.
The IRS generally approve an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time.
The IRS will explore all other payment options before submitting an offer in compromise. The Offer in Compromise program is not for everyone.
If you hire a tax professional to help you file an offer, be sure to check his or her qualifications.
Make sure you are eligible
Before the IRS can consider your offer, you must be current with all filing and payment requirements. You are not eligible if you are in an open bankruptcy proceeding.
Submit your offer Tax Debt Settlement Offer
Your completed offer package will include:
1. Form 433-A (OIC) (individuals) or
2. 433-B (OIC) (businesses) and all required documentation as specified on the forms;
Form 656(s) – individual and business tax debt (Corporation/ LLC/ Partnership) must be submitted on separate Form 656;
3. $150 application fee (non-refundable); and
4. Initial payment (non-refundable) for each Form 656.
Select a payment option for the IRS
Your initial payment will vary based on your offer and the payment option you choose:
Lump Sum Cash: Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.
Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.
If you meet the Low Income Certification guidelines, you do not have to send the application fee or the initial payment and you will not need to make monthly installments during the evaluation of your offer. See your application package for details.
Understand the process to Settle your tax debt
While your offer is being evaluated:
- Your non-refundable payments and fees will be applied to the tax liability (you may designate payments to a specific tax year and tax debt);
- A Notice of Federal Tax Lien may be filed;
- Other collection activities are suspended;
- The legal assessment and collection period is extended;
- Make all required payments associated with your offer;
- You are not required to make payments on an existing installment agreement; and
- Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.
Contact us today for free initial tax consultation and find out whether you are a qualified candidate for the IRS offer in compromise program otherwise known as IRS settlements.
We have over 60 years of direct work experience with the Internal Revenue Service in the local, district, and regional tax offices of the IRS.
On staff is a former IRS settlement officer who not only worked the IRS offer in compromise program but also for taught the program to new IRS agents.
We are true experts for the tax debt settlement program.
How to Settle your Tax Debt – Pennies on a Dollar – Former IRS Settlement Officer
