by Fresh Start Tax | Oct 11, 2019 | Tax Help
Michael Sullivan Fresh Start Tax Christian Tax Expert
Michael Sullivan Fresh Start Tax Expert, seen of Fox Business New and ABC, The Briefing Room, on IRS matters. <><
We are affordable former IRS agents who specialize in the settling of IRS tax debts and the filing of back on file tax returns. Since 1982. A plus rated, BBB.
We are a referring partner of Crown Financial Ministries
We have over 200 years of professional tax experience in over 100 years of working directly for the Internal Revenue Service in the local, district and regional tax offices of the Internal Revenue Service.
As former IRS agents, we worked also as managers, supervisors, appellate agents, and teaching instructors. There’s not many firms that have more direct IRS combined experience.
You can call us today for a free initial tax consultation and we will give you a specific actions and exit an strategy to rid yourself of the IRS problem completely.
Dealing with IRS and Settling IRS Tax Debt
IRS generally deals with tax debt by asking for a documented financial statement to make a determination on how IRS will settle your case off the IRS collection computer.
Once IRS reviews your documented financial statement there are five different closing methods IRS will use to settle your case.
1.IRS Tax Hardships.
When IRS determines after reviewing your financial statement you do not have the ability to pay the tax based on their standards, IRS can put you into a currently not collectible status. While this status penalties and interest will run an IRS will resurface the case in one to three years.
Over 40% of taxpayers who have outstanding debt have their cases put in this hardship or currently not collectible status.
2. Payment plan or installment agreement.
After review of your current financial statement, IRS can give you a monthly payment plan and there are variety of payment plans that you can go and seek. The IRS has an online payment agreement based on dollar amounts but is best to calls for free analysis to make sure you qualify for the one that fits your financial needs at this time.
Over 6.5 million taxpayers have their cases placed in installment agreements every year.
3. The offer in compromise to settle your tax debt.
Over 78,000 offers are filed every year and approximately 32,000 are accepted by the Internal Revenue Service for an average settlement of $7000.
The offer in compromise is a very specific settlement it is best to seek the advice of a true tax professional to get you the lowest settlement possible.
As a former IRS agent we worked the offer in compromise program and we are extremely familiar with the settlements and how they work. We can absolutely assure you we can settle your case for the lowest dollar possible for your current tax that.
4.File Bankruptcy.
There are variety of bankruptcy options to resolve your tax debt. When you call us today we will review with you the different options and see if they applied your case. To file a Chapter 7 taxes need to be three years or older, filed for two years and assessed for 270 days. Other rules apply but these are the general rules.
5. Statute of limitation expiration.
There is a 10 year statute of the limitation on IRS collection cases. The statute runs when IRS takes your tax return and puts it on their IRS collection computer.
Various things extend the statute of limitation. When we review your case we will go over the case file with you to determine where the statute is on your given tax years.
Filing Tax Returns or Unfiled Back Tax Years
Over 16 million taxpayers do not file annual tax returns.
If you have not filed for many many years there is an IRS policy statement 5-1-133 that says you only have to file the last six years.
You should know that IRS keeps income transcripts for the last six years.
We have the ability through back end portal to pull transcripts to find out what has been filed what has not been filed AND the pull your wage and income reports without alerting the IRS.
If you do not have tax records to file your tax returns, we can prepare your return under reconstructive methods and not only get your tax return filed but settle your case at the same time.
We are experts in the reconstructed process because some of the members of our team are former IRS agents who not only worked but taught this reconstructive methods to new IRS agents.
Call us today for a free initial tax consultation and we will give you the very best settlement possible with IRS.<><
We can file your returns and settle your debt all at the same time.
LOS ANGELES + Christian Tax Company + Attorneys, CPA’s + Unfiled Tax Returns + Settling IRS Tax Debt + Former IRS Agents + IRS Tax Problem Debt Relief
by Fresh Start Tax | Oct 11, 2019 | Tax Help
We are a full-service affordable Christian Tax Firm specializing in tax, representation, settlements, IRS, Sales Tax Audit, or Collection problems. <><
We are a partner of Crown Financial ministry.
We are used by hundreds in Los Angeles.
Proverbs 12:15
The way of a fool is right in his own eyes, but a wise man listens to advice.
Proverbs 11:14
Where there is no guidance, a people falls, but in an abundance of counselors there is safety.
Proverbs 15:22
Without counsel plans fail, but with many advisers they succeed.
Proverbs 19:20-21
Listen to advice and accept instruction, that you may gain wisdom in the future.
We Can File and Settle All At the Same Time, no worries.
We are affordable former IRS agents who specialize in the settling of IRS tax debts and the filing of back on file tax returns. Since 1982. A plus rated, BBB.
We have over 200 years of professional tax experience in over 100 years of working directly for the Internal Revenue Service in the local, district and regional tax offices of the Internal Revenue Service.
As former IRS agents, we worked also as managers, supervisors, appellate agents, and teaching instructors. There’s not many firms that have more direct IRS combined experience that are firm.
You can call us today for a free initial tax consultation and we will give you a specific actions and exit an strategy to rid yourself of the IRS problem completely.
Dealing with IRS and Settling Back IRS Tax Debt, at the Same Time
IRS generally deals with tax debt by asking for a documented financial statement to make a determination on how IRS will settle your case off the IRS collection computer.
Once IRS reviews your documented financial statement there are five different closing methods IRS will use to settle your case.
1. IRS Tax Hardships.
When IRS determines after reviewing your financial statement you do not have the ability to pay the tax based on their standards, IRS can put you into a currently not collectible status. While this status penalties and interest will run an IRS will resurface the case in one to three years.
Over 40% of taxpayers who have outstanding debt have their cases put in this hardship or currently not collectible status.
2. Payment plan or installment agreements.
After review of your current financial statement, IRS can give you a monthly payment plan and there are variety of payment plans that you can go and seek. The IRS has an online payment agreement based on dollar amounts but is best to calls for free analysis to make sure you qualify for the one that fits your financial needs at this time.
Over 6.5 million taxpayers have their cases placed in installment agreements every year.
3. The offer in compromise to settle your IRS tax debt.
Over 78,000 offers are filed every year and approximately 32,000 are accepted by the Internal Revenue Service for an average settlement of $7000.
The offer in compromise is a very specific settlement it is best to seek the advice of a true tax professional to get you the lowest settlement possible.
As a former IRS agent we worked the offer in compromise program and we are extremely familiar with the settlements and how they work. We can absolutely assure you we can settle your case for the lowest dollar possible for your current tax that.
4. File Bankruptcy.
There are variety of bankruptcy options to resolve your tax debt. When you call us today we will review with you the different options and see if they applied your case. To file a Chapter 7 taxes need to be three years or older, filed for two years and assessed for 270 days. Other rules apply but these are the general rules.
5. Statute of limitation expiration on IRS tax debt.
There is a 10 year statute of the limitation on IRS collection cases. The statute runs when IRS takes your tax return and puts it on their IRS collection computer.
Various things extend the statute of limitation.
When we review your case we will go over the case file with you to determine where the statute is on your given tax years.
Unfiled Tax Returns + Filing Tax Returns or Unfiled Back Tax Years, with or without tax records
Over 16 million taxpayers do not file annual tax returns.
If you have not filed for many many years there is an IRS policy statement 5-1-133 that says you only have to file the last six years.
You should know that IRS keeps income transcripts for the last six years.
We have the ability through back end portal to pull transcripts to find out what has been filed what has not been filed AND the pull your wage and income reports without alerting the IRS.
If you do not have tax records to file your tax returns, we can prepare your return under reconstructive methods and not only get your tax return filed but settle your case at the same time.
We are experts in the reconstructed process because some of the members of our team are former IRS agents who not only worked but taught this reconstructive methods to new IRS agents.
Call us today for a free initial tax consultation and we will give you the very best settlement possible with IRS.
We can file your returns and settle your debt all at the same time.
Christian Tax Services Firm + Income Tax Preparation, Filing Back, Past, Late Tax Return & Owe IRS Debt +Tax Settlements + FORMER IRS + Attorneys, CPA’s
by Fresh Start Tax | Oct 10, 2019 | Tax Help
I am a Former IRS Offer in Compromise Specialist, Former IRS Agent, I know all the inside secrets. I accepted Offers for the IRS. I was also a teaching instructor with the IRS.
The Internal Revenue Service does not take accepting offers and compromise lightly.
Only certain revenue officers become offer specialists and they receive special training.
The person working the offer in compromise is a revenue officer who is very experienced in the collection of tax and the examination of financial statements. IRS has special classes set up for those wanting to become offer in compromise specialist.
I am a former IRS agent and revenue officer and taught the offer in compromise program to IRS agents one become experts in this matter.
IRS spends a significant amount of time on offers in compromise because all offers are public record. IRS values the consistencies in the acceptance of offers in compromise. IRS wants all taxpayers treated equally, without favoritism with the same set of standards for all.
When a revenue officer gets the case to work an offer in compromise that agent scans the entire case file to make sure the offer in compromise makes sense.
Therefore they carefully look at income on tax returns, bank statements, cost of living, and the financial statement that you are turning in for IRS to settlement.
You would be surprised as a former reviewing revenue officer some of the submissions that are turned into IRS. I encourage the public if they are sending in their own offer in compromise, to make sure if there is anything out of order or unusual that they put a clarifying statement as an attachment.
IRS does an extensive asset search to verify you are telling the truth on the financial statement. The higher dollar amount the more due diligence that IRS will conduct to make sure your offer can be accepted.
IRS may check on the following:
IRS will check all the documents submitted by the taxpayer and look for flags, they may look at things like:
1. all life insurance policies,
2. motor vehicle records and applications,
3. financial statements turned into lenders,
4. IRS can check credit card applications,
5. equity and all assets,
6. any stocks or securities are closely held corporations and LLCs,
7. life insurance, pension or profit sharing,
8. furniture fixtures and personal effects,
9. motor vehicles, airplanes, boats, real estate interest,
10. transfers of properties,
11. accounts and notes receivable,
12. income producing assets,
13. inventory, machinery, equipment, tools of trade,
14. valuations of businesses,
15. future income potential,
16. collateral agreement,
17. find out whether or not people are living together and have shared expenses,
18 .limited liability issues,
19. Run Full Google Searches,
20. Get a copy of your credit reports,
21. Check the Accuriant Search Engines,
22. Pull licenses searches,
23. May also use Lexis Nexis for asset searches,
24. Check if you are a beneficiary,
25. and check if you ever transfer any property, assets, or anything beyond the reach of the federal government.
26. IRS checks for pending law suits.
The IRS agent can check on the aforementioned and any other thing that they feel does not make sense or there is a flag raised on the statement.
Have questions or concerns?
Call us for a free initial tax consultation and we will go over your offer in compromise and find out if you can settle your tax debt through the offer in compromise program.
You will be speaking the true IRS tax experts and former employees who know exactly what the formulas, settlement methodologies, so you can find out what is the lowest dollar possible IRS will accept.
by Fresh Start Tax | Oct 10, 2019 | Tax Help
I am a Former IRS Offer in Compromise Specialist, Former IRS Agent, I know all the inside secrets. I accepted Offers for the IRS.
The Internal Revenue Service does not take accepting offers and compromise lightly.
Only certain revenue officers become offer specialists and they receive special training.
The person working the offer in compromise is a revenue officer who is very experienced in the collection of tax and the examination of financial statements. IRS has special classes set up for those wanting to become offer in compromise specialist.
I am a former IRS agent and revenue officer and taught the offer in compromise program to IRS agents one become experts in this matter.
IRS spends a significant amount of time on offers in compromise because all offers are public record. IRS values the consistencies in the acceptance of offers in compromise. IRS wants all taxpayers treated equally, without favoritism with the same set of standards for all.
When a revenue officer gets the case to work an offer in compromise that agent scans the entire case file to make sure the offer in compromise makes sense.
Therefore they carefully look at income on tax returns, bank statements, cost of living, and the financial statement that you are turning in for IRS to settlement.
You would be surprised as a former reviewing revenue officer some of the submissions that are turned into IRS. I encourage the public if they are sending in their own offer in compromise, to make sure if there is anything out of order or unusual that they put a clarifying statement as an attachment.
IRS does an extensive asset search to verify you are telling the truth on the financial statement. The higher dollar amount the more due diligence that IRS will conduct to make sure your offer can be accepted.
IRS may check on the following:
IRS will check all the documents submitted by the taxpayer and look for flags, they may look at things like:
1. all life insurance policies,
2. motor vehicle records and applications,
3. financial statements turned into lenders,
4. IRS can check credit card applications,
5. equity and all assets,
6. any stocks or securities are closely held corporations and LLCs,
7. life insurance, pension or profit sharing,
8. furniture fixtures and personal effects,
9. motor vehicles, airplanes, boats, real estate interest,
10. transfers of properties,
11. accounts and notes receivable,
12. income producing assets,
13. inventory, machinery, equipment, tools of trade,
14. valuations of businesses,
15. future income potential,
16. collateral agreement,
17. find out whether or not people are living together and have shared expenses,
18 .limited liability issues,
19. Run Full Google Searches,
20. Get a copy of your credit reports,
21. Check the Accuriant Search Engines,
22. Pull licenses searches,
23. May also use Lexis Nexis for asset searches,
24. Check if you are a beneficiary,
25. and check if you ever transfer any property, assets, or anything beyond the reach of the federal government.
The IRS agent can check on the aforementioned and any other thing that they feel does not make sense or there is a flag raised on the statement.
Why use Fresh Start Tax LLC
You can settle for less by knowing the system.
You can engage a Former IRS Agent, who specialized in Offer in Compromise Settlements as a Former IRS Agent. Since 1982.
As a former IRS agent and teaching instructor with the IRS, we know all the settlements, protocols, and necessary techniques to help you settle your case for the lowest amounts allowed by law.
There are very exacting procedures to get an offer in compromise settlement approved by the Internal Revenue Service.
Facts about the Offer in Compromise Settlements
1. The average Offer in Compromise Settlement takes between 6- 9 months to work by the IRS,
2. The average Offer in Comprise settlement is 11 cents on a dollar,
3. 38% of all offers in compromise are accepted by the IRS,
4. All accepted Offers in Compromise Settlements are a matter of Public record,
5. The average time it take the IRS to work an Offer in Compromise is between 10 – 20 hours.
6. Specially trained IRS Agents work the OIC Program.
Do not be bullied by the IRS.
The Offer in Compromise Settlement Program
The new Fresh Start Program offered by the IRS is making life simple for those who qualify for an Offer in Compromise Settlement however a professional tax company has a much better chance of getting Offers in Compromise accepted because they understand the guidelines the Internal Revenue Service has set forth.
The filing of an Offer in Compromise Settlement and settling back taxes is much more than filling out the paperwork and submitting it to the IRS.
Our experience staff has former IRS agents who have worked the Offer in Compromise (OIC) program while at the IRS.
They have the knowledge necessary to get Offers in Compromise through the system if you qualify for the program.
Before an Offer in Compromise is filed, all the facts and your current financial statement need to be reviewed.
Before you spend any money or waste your time, let our staff walk you through the process. We have been processing Offers in Compromise for a combined 60 years just with the IRS alone.
There is a New Pre-Qualifier Tool.
To crack down on the amount of offers in compromise that are filed, the IRS has put out a new pre-qualifier tool to make sure that taxpayers are qualified and suitable candidate so they do not waste their time and money filing an offer compromise that has no chance of being accepted.
You can look at our homepage, click on IRS forms, and click on the pre-qualifier tool and you can walk through the information yourself to see if you qualify for offer compromise.
You should not give your money to any firm or tax professional unless you’re a truly qualified candidate for an offer in compromise
The Offer In Compromise Settlement
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:
1. the taxpayer must have filed all tax returns,
2. made all required estimated tax payments for the current year, and
3. made all required federal tax deposits for the current quarter if the taxpayer is a business owner with employees.
The IRS will not accept an OIC Settlement 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.
The IRS may accept an Offer in Compromise Settlement based on three grounds.
1. Doubt as to Liability.
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.
When Doubt as to Liability Exists:
Doubt as to liability generally exits when there is a dispute about the tax assessment that couldn’t be argued earlier for some reason.
In other words, the time to dispute the tax liability has passed, but you have a good argument for disputing it.
Doubt as to liability may come up in the following situations:
• New evidence is found after a tax assessment.
• You were unaware of a tax assessment and never received notices from the IRS.
• The IRS audited your return and adjusted your tax liability, but you didn’t receive notices from the IRS.
2. Doubt to Collectibility. Most common, you just do not have the money
Acceptance is permitted if there is doubt that the amount owed is fully collectible.
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.
3. Effective Tax Administration. ETA
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. The acceptance of these offers are very difficult to get accepted.
Submission of the Offer in Compromise Settlement
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 also submit Form 433-A (OIC) (PDF), Collection Information Statement for Wage Earners and Self-Employed Individuals,
and/or Form 433-B (OIC) (PDF), Collection Information Statement for Businesses. 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 (OIC) and/or Form 433-B (OIC).
Application Fee for the Offer in Compromise Settlement
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.
1. No application fee is required if the OIC is based on doubt as to liability.
2. 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.
Selecting your Offer in Compromise Settlement Terms
Taxpayers may choose to pay the offer amount in a lump sum or in installment payments.
A Lump Sum Offer Settlement
A “lump sum offer” is defined as an offer payable in 5 or fewer installments and within 24 months after the offer is accepted.
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.
Periodic Payment Offer in Compromise Settlement
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.
Call us today for free initial tax consultation and we will review with you your offer in compromise to see it if you have a possible offer that the IRS will accept.
by Fresh Start Tax | Oct 10, 2019 | Tax Help
I am a Former IRS Offer in Compromise Specialist, Former IRS Agent, I know all the inside secrets. I accepted Offers for the IRS.
You can settle for less by knowing the system. You can engage a Former IRS Agent, who specialized in Offer in Compromise Settlements as a Former IRS Agent. Since 1982.
As a former IRS agent and teaching instructor with the IRS, we know all the settlements, protocols, and necessary techniques to help you settle your case for the lowest amounts allowed by law.
There are very exacting procedures to get an offer in compromise settlement approved by the Internal Revenue Service.
Facts about the Offer in Compromise Settlements
1. The average Offer in Compromise Settlement takes between 6- 9 months to work by the IRS,
2. The average Offer in Comprise settlement is 11 cents on a dollar,
3. 38% of all offers in compromise are accepted by the IRS,
4. All accepted Offers in Compromise Settlements are a matter of Public record,
5. The average time it take the IRS to work an Offer in Compromise is between 10 – 20 hours.
6. Specially trained IRS Agents work the OIC Program.
IRS Payment Plans
Over 6 million taxpayers enter into IRS payment plans, installment agreements or monthly payments each and every year in back taxes.
Taxpayers must complete and fully document IRS form 433F that you can find directly on our website to get in IRS payment plan.
The Internal Revenue Service will take a close look at your income and your expenses and will compare those to the national standards found in your region that you live in.
It is extremely important to hire a tax professional who knows the system to get an IRS payment plan that is both fair to you in the Internal Revenue Service.
Taxpayers are unrepresented will find that the IRS will want more than you are willing to pay.
Do not be bullied by the IRS.
The Offer in Compromise Settlement Program
The new Fresh Start Program offered by the IRS is making life simple for those who qualify for an Offer in Compromise Settlement however a professional tax company has a much better chance of getting Offers in Compromise accepted because they understand the guidelines the Internal Revenue Service has set forth.
The filing of an Offer in Compromise Settlement and settling back taxes is much more than filling out the paperwork and submitting it to the IRS.
Our experience staff has former IRS agents who have worked the Offer in Compromise (OIC) program while at the IRS.
They have the knowledge necessary to get Offers in Compromise through the system if you qualify for the program.
Before an Offer in Compromise is filed, all the facts and your current financial statement need to be reviewed.
Before you spend any money or waste your time, let our staff walk you through the process. We have been processing Offers in Compromise for a combined 60 years just with the IRS alone.
There is a New Pre-Qualifier Tool.
To crack down on the amount of offers in compromise that are filed, the IRS has put out a new pre-qualifier tool to make sure that taxpayers are qualified and suitable candidate so they do not waste their time and money filing an offer compromise that has no chance of being accepted.
You can look at our homepage, click on IRS forms, and click on the pre-qualifier tool and you can walk through the information yourself to see if you qualify for offer compromise.
You should not give your money to any firm or tax professional unless you’re a truly qualified candidate for an offer in compromise
The Offer In Compromise Settlement
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:
1. the taxpayer must have filed all tax returns,
2. made all required estimated tax payments for the current year, and
3. made all required federal tax deposits for the current quarter if the taxpayer is a business owner with employees.
The IRS will not accept an OIC Settlement 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.
The IRS may accept an Offer in Compromise Settlement based on three grounds.
1. Doubt as to Liability.
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.
When Doubt as to Liability Exists:
Doubt as to liability generally exits when there is a dispute about the tax assessment that couldn’t be argued earlier for some reason.
In other words, the time to dispute the tax liability has passed, but you have a good argument for disputing it.
Doubt as to liability may come up in the following situations:
• New evidence is found after a tax assessment.
• You were unaware of a tax assessment and never received notices from the IRS.
• The IRS audited your return and adjusted your tax liability, but you didn’t receive notices from the IRS.
2. Doubt to Collectibility. Most common, you just do not have the money
Acceptance is permitted if there is doubt that the amount owed is fully collectible.
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.
3. Effective Tax Administration. ETA
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. The acceptance of these offers are very difficult to get accepted.
Submission of the Offer in Compromise Settlement
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 also submit Form 433-A (OIC) (PDF), Collection Information Statement for Wage Earners and Self-Employed Individuals,
and/or Form 433-B (OIC) (PDF), Collection Information Statement for Businesses. 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 (OIC) and/or Form 433-B (OIC).
Application Fee for the Offer in Compromise Settlement
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.
1. No application fee is required if the OIC is based on doubt as to liability.
2. 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.
Selecting your Offer in Compromise Settlement Terms
Taxpayers may choose to pay the offer amount in a lump sum or in installment payments.
A Lump Sum Offer Settlement
A “lump sum offer” is defined as an offer payable in 5 or fewer installments and within 24 months after the offer is accepted.
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.
Periodic Payment Offer in Compromise Settlement
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 Period of Time Rule
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.
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.
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 IRS rejects the Offer in Compromise Settlement
If the IRS rejects an OIC, then the taxpayer will be notified by mail.
The rejection 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.
The New Fresh Start Program by the IRS – Offers in Compromise Settlement (OIC)
The Offer in Compromise program permits qualified taxpayers with outstanding and unpaid tax liabilities to negotiate a full settlement for an amount that is less than the tax owed.
An OIC agreement generally will not be accepted by the IRS if it believes that the outstanding liability can be paid through a lump sum or other type of payment arrangement.
The IRS typically reviews the taxpayers’ income, expenses, assets and liabilities in great detail to make a determination regarding the taxpayers’ ability to pay.
In an effort to expand this program to a greater number of struggling taxpayers, the IRS has become more flexible in what it deems “ordinary and necessary” expenses in arriving at a taxpayer’s net monthly income.
Specifically, under the “Fresh Start Program,” the IRS has expanded the Allowable Living Expense Category to include additional expenses, such as credit card payments and bank fees, while increasing the total amount allowable.
The program also allows expenses for the repayment of student loans and delinquent state and local taxes. IRS has really tried to help the struggling taxpayer.
The most significant change to the OIC program under the “Fresh Start” initiative is the change in the calculation of the taxpayer’s “reasonable collection potential” under the future income component.
The “reasonable collection potential” (RCP ) is determined by analyzing the taxpayer’s net realizable equity in assets and future income.
The IRS now considers only one year of future income for offers that will be paid in full within five months when previously they considered four years of income. This is a huge change because the multiplier was such a huge number and scores of taxpayers could never pay off the offer.
The IRS will now consider two years of future income for offers paid in full within six to 24 months, down from five years of income.
For taxpayers whose reasonable collection potential is driven by future income and less by net realizable equity in assets, this change is likely to have a meaningful impact in the determination of whether they qualify for an OIC.
The overall result of these changes and improvements is that increasingly more financially troubled taxpayers will qualify for OIC relief.
Some Negative Implications
Apart from these favorable changes, there may still be negative implications of filing an OIC.
A potentially negative repercussion is that information provided through the OIC would provide the IRS with a financial road map for seizure and enforced collection action in the event the offer is rejected or withdrawn or the taxpayer defaults on the offer.
As a former IRS agent myself, any offer I received gave me a direct avenue to collect the tax if I rejected the offer and I had every potential collection tool available for me based on the current financial statement provided to me by the taxpayer. So use caution.
Be fully apprised the IRS may:
Run Full Google Search,
Get a copy of your credit reports,
Check the Accuriant Search Engines,
Pull licenses searches,
May also use Lexis Nexis
by Fresh Start Tax | Oct 10, 2019 | Tax Help
I am a former IRS agent and teaching instructor. Expert in the Offer in Compromise. Christian Tax Expert <><
We are a referral partner of Crown Financial. We are a Christian Tax Firm for all IRS & State Tax Problems.
As a former IRS agent not only did I worked the offer of compromise program but I taught it to agents moving forward in their position to understand and accept and deny offers in compromise.
I have been in practice since 1982 and A+ rated by the Better Business Bureau. I have worked thousands and thousands of cases.
Due to my experience both in the field, as an agent and a teaching instructor, I know the offer in compromise program inside and out.
The offer in compromise program is a very specialized field of tax expertise.
It is important to know that the average time spent on the acceptance of an offer in compromise is approximately 20 hours.
There is a voluminous amount of work that the IRS agent does before they can settle the case plus the accepted offer has to go up and down the line with signatures before the government can accept that offer in compromise.
You should know that every offer in compromise is open the public expunction at the regional offices.
IRS is very cautious on what offer they accept. IRS considers it a privilege and not a right to have your taxes discounted by the federal government.
It’s best to fill out the pre-qualifier tool or call a true expert before you send in a offer in compromise.
Call me for a free initial tax consultation and I will walk you through the process.
If your case cannot be resolved by offer in compromise program,there are two other programs taxpayers can qualify for.
The first is the IRS hardship and the second is the IRS payment plan. Keep in mind your financial statement is the sole determining factor on how IRS is going to close your case.
What is a Offer in Compromise
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.
IRS will consider your unique set of facts and circumstances before accepting an OIC.
IRS will look at some of the following:
1.Ability to pay;
2.Income;
3.Expenses; and
4.Asset equity.
IRS will 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 Offer in Compromise program is not for everyone. You truly must be an eligible candidate before IRS will accept the offer in compromise. You can walk to the pre-qualifier or find a true certified IRS offer specialist to see whether you have a chance to get your offer accepted.
Make sure you are eligible for the OIC
The IRS will return any newly filed Offer in Compromise (OIC) application if you have not filed all required tax returns and have not made any required estimated payments.
Any application fee included with the OIC will also be returned. Any initial payment required with the returned application will be applied to reduce your balance due. This policy does not apply to current year tax returns if there is a valid extension on file.
You are not eligible if you are in an open bankruptcy proceeding.
Submit your offer in compromise like this.
You’ll find step-by-step instructions and all the forms for submitting an offer in the Offer in Compromise Booklet, Form 656-B (PDF). Your completed offer package will include:
1.Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms;
2.Form 656(s) – individual and business tax debt (Corporation/ LLC/ Partnership) must be submitted on separate Form 656;
3.$186 application fee (non-refundable); and
Initial payment (non-refundable) for each Form 656.
Select a payment option to pay your offer in compromise.
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. If your offer is accepted, you will receive written confirmation. Any remaining balance due on the offer is paid 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.
Understand the process of an offer in compromise
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.
If your offer is accepted
You must meet all the Offer Terms listed in Section 7 of Form 656, including filing all required tax returns and making all payments;
Any refunds due within the calendar year in which your offer is accepted will be applied to your tax debt;
Federal tax liens are not released until your offer terms are satisfied; and
Certain offer information is available for public review by requesting a copy of a public inspection file.
If your offer is rejected
You may appeal a rejection within 30 days using Request for Appeal of Offer in Compromise, Form 13711 (PDF).
The IRS Independent Office of Appeals provides additional assistance on appealing your rejected offer.
Call us today to learn more about the offer in compromise and speak to true IRS tax experts.
Christian Tax Help + IRS Offer in Compromise Expert + Former IRS Offer Specialist + Settle Your Tax Debt For Less + Former IRS Agent Revenue Officer
