by Fresh Start Tax | Jan 11, 2016 | Tax Help
We are an affordable professional tax firm with over 65 years of direct IRS work experience. Since 1982. We worked out of the local South Florida IRS offices.
The answer is yes you can settle with IRS for pennies on the dollar but read this entire post. Last year the national rate was 38% acceptance of offers in compromise.
Everyone wants to settle with IRS but there is a very specific format and methodology that must be followed.
You could hear the truth about the offer in compromise program when you call us.
There are many myths about the pennies on the dollar program so you need to hear the truth before spending any money.
I was a former IRS agent and teaching instructor. I know the system inside and out.
As a former IRS agent I used to accept and reject offers in compromise.
I have heard countless horror stories from taxpayers who called me about firms that have ripped them off promising settlements.
There is a very specific system and methodology to get an offer in compromise approved for pennies on the dollar. Last year 38,000 taxpayers had their cases accepted. As a former IRS agent I taught the offer in compromise program at the district training center as a former employee.
The question is pennies on the dollar possible?
Yes it is as a matter of fact, over 38,000 taxpayers got their debt settled with the Internal Revenue Service for average settlement of $6500 last year.
There were a total of 78,000 applications for the pennies on the dollar, offer in compromise program last year.
With that being said there is much to say about this pennies on the dollar program called the offer in compromise.
Not everybody is eligible for the pennies on the dollar, offer in compromise program. At our firm we will take no clients money until we are no they are a true candidate for the settlement program.
There are many myths about the offer in compromise so IRS and in their great wisdom provides a pre-qualifier tool to find out if taxpayers are eligible for the offer in compromise program so taxpayers do not give their hard-earned money to unsuspecting tax firms promising tax settlements.
I would suggest anyone who wants to go ahead and settle their tax debt through the pennies on the dollar, offer in compromise program contact an experienced an honest tax professional, have them walk them through the pre-qualifier tool before they give their money to anybody.
If you have any questions or issues about the offer in compromise program to settle your debt for pennies on the dollar, call us today and we will review your case to let you know if you are a qualified and suitable candidate.
The IRS spends a lot of due diligence before they accept an offer in compromise. Many people ask why is this process not that simple. The answer is this, all accepted offers in compromise are a matter of public record for one year in the regional office where the offer was accepted.
The Internal Revenue Service does all that it can to make sure there is a matter of consistency within the offer in compromise program if not still be a tremendous public outcry.
As a former IRS agent in teaching instructor of the offer in compromise I would let any taxpayer know that they should go to an experienced tax firm pay the money can be represented for the offer. Right now there are over 7500 cases in the offer queue to be worked.
We are a full-service firm with an expertise in any IRS tax debt matter including offer in compromise.
One base rule for the offer in compromise program. IRS is only concerned about your income and assets. this includes your equity in your home, pension plans are IRA’s.
One nice thing about the IRS accepting your offer in compromise is that once you meet the terms of the settlement they will release your federal tax lien.
Below you will find out what you need to know about the offer in compromise program.
OIC Program to Settle For Pennies On a Dollar
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:
• Ability to pay;
• Income;
• Expenses; and
• Asset equity.
IRS generally approves an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time.
Make sure you are eligible to settle for pennies on a dollar!
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.
Use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.
Submitting your offer to settle for pennies on a dollar
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:
• Form 433-A (OIC) (individuals) or 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;
• $186 application fee (non-refundable); and
• Initial payment (non-refundable) for each Form 656.
Select a payment option for the pennies on a dollar OIC
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.
Understand the process of OIC
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.
Call us today for free initial tax consultation to see if you are a certified an eligible candidate for the offer in compromise program.
We call our office you will speak to a true IRS tax professional. So yes pennies on a dollar is possible, however make sure you’re a qualified candidate.
Call us today for a free initial tax consultation and speak to a true IRS expert about the offer in compromise the way to settle your tax debt for pennies on a dollar if you qualify.
Offer in Compromise + Settle Tax Debt + Pennies On a Dollar + Former IRS Explains the Offer in Compromise
by Fresh Start Tax | Jan 11, 2016 | Tax Help
We are a full service tax firm that specializes South Florida Sales Tax Audit Defense and back tax debt for Florida Sales Tax.
We are the affordable Sales Tax Experts in the State of Florida composed of Florida Sales CPA’s and Former Government Agents who specialize in Florida Sales Tax Issues and Problems. Since 1982.
We are moving towards a situation never seen in Florida and the United States and the Florida Department of Revenue is not backing down one bit. Florida’s Department of Revenue is sending out more enforcement and audit notices than they have in their history.
If you have received a Notice or Letter from the Criminal Division the only person you should be speaking with is a competent and experienced Florida Sales Tax Attorney and no one else.
Only a Florida Sales Tax Attorney can protect you under Attorney-Client Privilege.
There are several steps that you can take to fix your Sales Tax Problem immediately. Some information you should know.
A Professional and Experienced Firm, A plus Rated BBB
Fresh Start Tax LLC has its main office in Ft. Lauderdale, Florida and the firms staff consists of Florida Sales Tax Attorneys, CPA’S, former IRS agents and former instructors who have worked hand in hand with the Florida’s Sales Tax and the Department of Revenue.
Fresh Start Tax and it’s principles have handled thousands and thousands of cases over the years, both in government service and in their professional practice. We use a private practice firm for any criminal cases.
Our typical client is one that has not filed or not reported matters involving sales taxes and or IRS related issues. We also have a network of attorneys that work criminal cases as well.
We handle cases all through the State of Florida.
Our professionals are members of various National Organizations, have been keynote speakers on tax issues and are certified by the Florida Department of Professional Regulation to administer and teach other professionals in their continuing educational programs. We are the professionals professional.
State of Florida sales tax representation includes the following matters with the Florida Department of Revenue:
• Tax audits on any and all sales tax issues and matters,
• Non-filing matters,
• Criminal investigations that are referred to attorneys that best fit your profile,
• Department of Revenue enforcement action or warrant proceedings
• Stipulated time payments,
• Requests for settlements or Compromise
The Keys to resolving your Florida Sales Tax Problem
There are several keys to make sure your case is resolved timely. These keys are necessary on every case. The Department of Revenue is interested in resolving the cases in their system. The DOR goal is to close cases and get them out of their inventory.
Here are the keys necessary to stop enforcement action on your back taxes.
• Have all your tax returns filed before you call Florida Sales Tax and the Department of Revenue on your back tax issues.
• Be prepared to give the Department of Revenue a financial statement whether you are a hardship candidate, want an installment agreement or want to settle your case.
• Be prepared to give the Department of Revenue all supporting documentation to prove your financial statement.
• Make sure you are current on deposit requirements.
Are you being Audited by Florida DOR, Read Carefully
The State of Florida, Department of Revenue audit taxpayers to:
• Enforce Florida tax laws uniformly.
• Deter tax evasion.
• Promote voluntary compliance.
• Educate taxpayers.
As a general rule, the State of Florida Sales Division accepts most tax returns as filed, however they audit some returns to verify accuracy and evaluate compliance.
Florida Sales Tax Audits do not always result in the taxpayer owing additional tax, penalty or interest.
The auditor may adjust a credit carryover or correct distribution without assessing additional tax. The auditor may even determine that a refund is due.
How Are Taxpayers Selected for Audit by the Florida Sales Tax Division
The methods for selecting a business or individual to audit vary from tax to tax.
Here are some examples of sources we use to identify a potential audit candidate:
• Internal Revenue Service information.
• Information sharing programs with other states and state agencies.
• Computer-based random selection.
• Analysis of Florida tax return information.
• Business publications, periodicals, journals, and directories.
What Types of Records Will I Need to Provide to an Auditor or Inspector?
When we notify you of our intent to audit, we will also tell you what records you will need to provide.
The types of records may include, but are not limited to:
1. General ledgers and journals
2. Cash receipt and disbursement journals
3. Purchase and sales journals
4. Sales tax exemption or resale certificates
5. Florida tax returns
6. Federal tax returns
7. Depreciation schedules
8. Property records
9. Other documentation to verify amounts entered on tax returns
You must keep your records for three years since an audit can extend back that far.
The Department may audit for periods longer than three years if you did not file, or filed a substantially incorrect return or payment.
Your Rights During an Sales Tax Audit
The Florida Taxpayer’s Bill of Rights provides protection for taxpayers’ privacy and assets during their interactions with Revenue employees.
Your rights include:
• The right to fair treatment.
• The right to get available information and prompt, accurate responses to your questions.
• The right to have the Department begin and complete its audit in a timely manner after we notify you of our intent to audit.
• The right to get simple, nontechnical statements which explain the reason for audit selection and the procedures, remedies, and rights available during audit, appeals, and collection proceedings.
Florida Sales Tax Audit Defense, Dept of Revenue + Owe Sales Tax + Former Agents + 33076, 33065, 33067, 33063, 33321
by Jim Magary | Jan 11, 2016 | Tax Help
We are a full service tax firm that specializes South Florida Sales Tax Audit Defense and back tax debt for Florida Sales Tax.
We are the affordable Sales Tax Experts in the State of Florida composed of Florida Sales CPA’s and Former Government Agents who specialize in Florida Sales Tax Issues and Problems. Since 1982.
We are moving towards a situation never seen in Florida and the United States and the Florida Department of Revenue is not backing down one bit. Florida’s Department of Revenue is sending out more enforcement and audit notices than they have in their history.
If you have received a Notice or Letter from the Criminal Division the only person you should be speaking with is a competent and experienced Florida Sales Tax Attorney and no one else.
Only a Florida Sales Tax Attorney can protect you under Attorney-Client Privilege.
There are several steps that you can take to fix your Sales Tax Problem immediately. Some information you should know.
A Professional and Experienced Firm, A plus Rated BBB
Fresh Start Tax LLC has its main office in Ft. Lauderdale, Florida and the firms staff consists of Florida Sales Tax Attorneys, CPA’S, former IRS agents and former instructors who have worked hand in hand with the Florida’s Sales Tax and the Department of Revenue.
Fresh Start Tax and it’s principles have handled thousands and thousands of cases over the years, both in government service and in their professional practice. We use a private practice firm for any criminal cases.
Our typical client is one that has not filed or not reported matters involving sales taxes and or IRS related issues. We also have a network of attorneys that work criminal cases as well.
We handle cases all through the State of Florida.
Our professionals are members of various National Organizations, have been keynote speakers on tax issues and are certified by the Florida Department of Professional Regulation to administer and teach other professionals in their continuing educational programs. We are the professionals professional.
State of Florida sales tax representation includes the following matters with the Florida Department of Revenue:
• Tax audits on any and all sales tax issues and matters,
• Non-filing matters,
• Criminal investigations that are referred to attorneys that best fit your profile,
• Department of Revenue enforcement action or warrant proceedings
• Stipulated time payments,
• Requests for settlements or Compromise
The Keys to resolving your Florida Sales Tax Problem
There are several keys to make sure your case is resolved timely. These keys are necessary on every case. The Department of Revenue is interested in resolving the cases in their system. The DOR goal is to close cases and get them out of their inventory.
Here are the keys necessary to stop enforcement action on your back taxes.
• Have all your tax returns filed before you call Florida Sales Tax and the Department of Revenue on your back tax issues.
• Be prepared to give the Department of Revenue a financial statement whether you are a hardship candidate, want an installment agreement or want to settle your case.
• Be prepared to give the Department of Revenue all supporting documentation to prove your financial statement.
• Make sure you are current on deposit requirements.
Are you being Audited by Florida DOR, Read Carefully
The State of Florida, Department of Revenue audit taxpayers to:
• Enforce Florida tax laws uniformly.
• Deter tax evasion.
• Promote voluntary compliance.
• Educate taxpayers.
As a general rule, the State of Florida Sales Division accepts most tax returns as filed, however they audit some returns to verify accuracy and evaluate compliance.
Florida Sales Tax Audits do not always result in the taxpayer owing additional tax, penalty or interest.
The auditor may adjust a credit carryover or correct distribution without assessing additional tax. The auditor may even determine that a refund is due.
How Are Taxpayers Selected for Audit by the Florida Sales Tax Division
The methods for selecting a business or individual to audit vary from tax to tax.
Here are some examples of sources we use to identify a potential audit candidate:
• Internal Revenue Service information.
• Information sharing programs with other states and state agencies.
• Computer-based random selection.
• Analysis of Florida tax return information.
• Business publications, periodicals, journals, and directories.
What Types of Records Will I Need to Provide to an Auditor or Inspector?
When we notify you of our intent to audit, we will also tell you what records you will need to provide.
The types of records may include, but are not limited to:
1. General ledgers and journals
2. Cash receipt and disbursement journals
3. Purchase and sales journals
4. Sales tax exemption or resale certificates
5. Florida tax returns
6. Federal tax returns
7. Depreciation schedules
8. Property records
9. Other documentation to verify amounts entered on tax returns
You must keep your records for three years since an audit can extend back that far.
The Department may audit for periods longer than three years if you did not file, or filed a substantially incorrect return or payment.
Your Rights During an Sales Tax Audit
The Florida Taxpayer’s Bill of Rights provides protection for taxpayers’ privacy and assets during their interactions with Revenue employees.
Your rights include:
• The right to fair treatment.
• The right to get available information and prompt, accurate responses to your questions.
• The right to have the Department begin and complete its audit in a timely manner after we notify you of our intent to audit.
• The right to get simple, nontechnical statements which explain the reason for audit selection and the procedures, remedies, and rights available during audit, appeals, and collection proceedings.
Florida Sales Tax Audit Defense, Dept of Revenue + Owe Sales Tax + Former Agents + 33076, 33065, 33067, 33063, 33321
by Fresh Start Tax | Jan 11, 2016 | Tax Help
“Affordable” Tax Professionals can easily resolve your problem, over 65 years of former IRS work experience. Local Former IRS Agents, we know the system.
We are former IRS agents and managers who have 65 years in the local, district and regional tax office of South Florida IRS offices.
If you need to file tax returns for past years there is a very simple process to get you into the back system worry free.
As former IRS agents and managers we have worked both sides of taxpayers problems and issues and there is a very systematic way to resolve your past due tax issues.
With or without tax records we can get you back in the system worry free.
As former IRS agents and managers we can explain to you how to get back in the system without worry.
When you call us on your initial consultation we will walk you through the requirements. The process is easy, simple and very affordable.
Millions have not filed but it will catch up with you. at some point in time IRS will match up your W-2s and 1099 and find out there is no tax return on the system and they will investigate through what’s called the taxpayer delinquent investigation.
If you do not prepare your past due returns the Internal Revenue Service under 6020 B of the IRS code can prepare the tax returns for you. You do not want this to happen to you. You will pay the highest amount allowed by law.
Believe it or not, millions of people have not file tax returns but at some point in your life you’re going to have to file, the big question, what is at process like? I’m going to prison? How much trouble am I in ?, or how can I do this without worry?.
There is a way to get back in the system without pain, HOW, simply file your tax returns.
The Big Question : How many back years do I file?
The answer varies on the facts of the case. As a general rule, as former IRS agents and managers we recommend you file anywhere between three and six years.
Some of the determining factors in making decisions are:
1. how much income have you made in the last six years,
2. what is your asset base,
3. what do your bank accounts look like,
4. have you always operated in cash,
5. what are your average monthly expenses for the time of nonfiling.
Tax Preparation for Never Filed Tax Returns
If you are a W-2 or 1099 or wage earner it will be very easy to compute your income.
We can simply ask IRS for copies of income transcripts for the last six years.
IRS will provide to us all income reports on W-2’s and 1099 s. Tax reconstruction is easy and simple. We can find out what expenses you have and prepare your tax return based on reconstructive methods.
If you are a cash person we can back into your income by finding what you’re annualized monthly expenses are multiplying by 12 and come up with an average base for computing gross income.
We have prepared hundreds upon hundreds of tax returns of taxpayers who have never filed. We can walk you to the process and get you back in the system seamlessly.
Below you will find the IRS policy statement regarding people who will never file tax returns.
What happens if I owe back taxes, there are available programs to help settle tax debt.
If you will owe back taxes we will work out a tax settlement for you.
IRS will require a current financial statement on form 433F expect that financial statement to be fully documented.
As a general rule, IRS places taxpayers who cannot pay their back tax debt into one of three categories.
IRS will consider you either to be a:
1 . Current hardship,
2. a monthly candidate for payments, or
3. a tax debt settlement candidate for the offer in compromise program.
Keep in mind that the determination that IRS will make your open case if you owe back taxes is completely dependent on your current financial statement, therefore the filling out, the documentation will determine your outcome on your case. That’s why it is critical you have a trustworthy tax firm help resolve these issues for you so you need not worry.
IRS has a policy statement regarding filing past due tax returns
1.2.14.1.18 (08-04-2006)
IRS Policy Statement 5-133
1. Delinquent or prior years tax returns—enforcement of filing requirements
2. Taxpayers failing to file tax returns will be requested to prepare and file all such returns except in instances where there is an indication that the taxpayer’s failure to file the required return or returns was willful or if there is any other indication of fraud.
All delinquent returns submitted by a taxpayer, whether upon his/her own initiative or at the request of a Service representative, will be accepted.
However, if indications of wilfulness or fraud exist, the special procedures for handling such returns must be followed.
3. Where it is determined that required returns have not been filed, the extent to which compliance for prior years will be enforced will be determined by reference to factors ensuring compliance and evenhanded administration of staffing and other Service resources.
4. Factors to be taken into account include, but are not limited to:
a. prior history of noncompliance,
b. existence of income from illegal sources, effect upon voluntary compliance, anticipated revenue, and collectibility, in relation to the time and effort required to determine tax due.
Consideration will also be given any special circumstances existing in the case of a particular taxpayer, class of taxpayer, or industry, or which may be peculiar to the class of tax involved.
5. Normally, application of the above criteria will result in enforcement of delinquency procedures for not more than six (6) years.
There are special cases in which the IRS will ask for more than six years.
Those cases generally involve those with a great deal of access with a high potential of collection and probability. There are very few cases that meet this criteria.
Call us today for a free initial tax consultation. You can speak to true IRS tax experts regarding the nonfiling of federal tax returns and the settling of your tax debt to the various programs offered by IRS.
We have over 206 years of professional tax experience in over 65 years working directly for the Internal Revenue Service and the local, district, and regional tax offices of the IRS.
If you need to file your back tax returns and settle your tax debt with Internal Revenue Service call one of the most experienced professional South Florida tax firms, since 1982 we have been serving the South Florida area.
Need to File Tax Returns For Past Years + Unfiled Returns & Settle Tax Debt + Former IRS + 33076, 33065, 33067, 33063, 33321
by Jim Magary | Jan 11, 2016 | Tax Help
We are former AFFORDABLE IRS agents and managers who know the system. Since 1982, Local Tax Firm in South Florida
Do you owe payroll tax debt or back trust fund tax debt?
Call us today and find out all your options on how to get immediate and permanent IRS tax relief. You can speak to a former IRS agent or manager who has worked this system for years. You will not find more experience IRS tax experience for IRS tax problems.
If the IRS has found you a responsible person for the trust fund penalty, call us today for free initial tax consultation and we will walk you through the process of resolving this tax at once and for all.
There are various options available. As soon as review your case we can instantly tell you ways to help resolve your problem.
Being former IRS agents and managers we know every possible solution to remedy this tax debt. We can resolve and possibly reduce your tax obligation.
There are various options you have for tax relief:
The basic options include:
1. trust fund appeals, the possibility of an offer in compromise, doubt to liability,
2.hardships, or currently not collectible,
3. payments plan, and
4. the offer in compromise, if you are a qualified and suitable candidate.
5. bankruptcy is another option.
The Process of Getting IRS Tax Debt Relief on Trust Fund Tax Debt
We need to look to find out if you were truly responsible under 6672 of the IRS code. many time IRS ram rods these penalties to people who truly were not responsible for trust fund taxes.
I’ve work so many cases and being a former IRS agent IRS just tries to set these penalties up against everybody and many people do not have proper representation to fight IRS.
We will carefully review your case to find out if you were truly responsible for the trust fund penalty.
We will conduct a review to find out if there is any way that we can appeal for change the assessment of this trust fund tax.
If we feel we would’ve beat this assessment through the appellate process we can go ahead and file an offer in compromise as to doubt as to liability and appeal this assessment.
If you are responsible for the tax, IRS will take a current financial statement and make a determination based on the collectibility of the tax.
How the Internal Revenue Service will work your case if you owe the IRS tax debt.
IRS will require a 433A or 433F, an individual financial statement.
You can find that form directly on our website.
Many times the IRS uses 433F, depending were the cases in the system. Cases worked in the ACS system uses shorter version of the financial statement.
If the case is worked in the local office the revenue officer will use form 433.A
That financial statement will need to be fully documented along with bank statements, copies of checks and monthly expenses.
We will walk you through the process of how the IRS will work your case in the collection action that can possibly taken.
Will also review with you the IRS national standards program on all cases for those who owe back taxes.
Once IRS reviews your current financial statement they will make a determination and generally put you in one of two categories with the option of filing an offer in compromise.
The Internal Revenue Service may:
1.IRS determines on 40% of the cases that taxpayers are put into hardship which means they can’t pay the tax at this time. Sometimes it is called currently not collectible. Cases that are placed at currently not collectible or hardship stay in there for a period of 2 to 3 years and come back out to the field at a later time.
2. 6.5 million people enter monthly payment plans and pay a certain amount based on their current documented financial statement.
Other taxpayers file an offer in compromise to settle their case for pennies on the dollar. The offer in compromise requires a lot of skill and expertise to have accepted by the Internal Revenue Service.
What is an offer in compromise. OIC
It 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.
Taxpayers who can fully pay the liabilities through an installment agreement or other means, will not be eligible for a OIC in most cases.
in order to be eligible for a OIC, the taxpayer must have filed all tax returns, made all required estimated tax payments for the current year and made all required federal tax deposits for the current quarter if the taxpayer is a business owner with employees.
In most cases, the IRS will not accept a OIC unless the amount offered by a taxpayer is equal to or greater than the reasonable collection potential (the RCP).
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 a OIC based on three grounds:
• First, the IRS can accept a compromise if there is doubt as to liability. A compromise meets this only when there is a genuine dispute as to the existence or amount of the correct tax debt under the law.
• Second, the IRS can accept a compromise if there is doubt that the amount owed is fully collectible. Doubt as to collectibility exists in any case where the taxpayer’s assets and income are less than the full amount of the tax liability.
• Third, the IRS can accept a compromise 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.
When submitting a OIC based on doubt as to collectibility or based on effective tax administration, taxpayers must use the most current version of:
1. Form 656, Offer in Compromise, and also submit Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-Employed Individuals, and/or,
2. Form 433-B (OIC), Collection Information Statement for Businesses. A taxpayer submitting a 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).
Form 656 and referenced collection information statements are available in the Offer in Compromise Booklet, Form 656-B (PDF).
In general, a taxpayer must submit a $186 application fee with the Form 656. Do not combine this fee with any other tax payments.
However, there are two exceptions to this requirement:
• First, no application fee is required if the OIC is based on doubt as to liability.
• Second, the fee is not required if the taxpayer is an individual (not a corporation, partnership, or other entity) who qualifies for the low-income exception.
This exception applies if the taxpayer’s total monthly income falls at or below 250 percent of the poverty guidelines published by the Department of Health and Human Services. Section 4 of Form 656 contains the Low Income Certification guidelines to assist taxpayers in determining whether they qualify for the low-income exception.
A taxpayer who claims the low-income exception must complete section 4 of Form 656 and check the certification box.
Taxpayers may choose to pay the offer amount in a lump sum or in installment payments.
A “lump sum cash offer” is defined as an offer payable in 5 or fewer installments within 5 or fewer months after the offer is accepted. If a taxpayer submits a lump sum cash 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 $186 application fee.
The 20 percent payment is “nonrefundable” meaning it will not be returned to the taxpayer even if the offer is rejected or returned to the taxpayer without acceptance.
Instead, the 20 percent payment 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 payment.
An 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 $186 application fee. This amount is nonrefundable, just like the 20 percent payment required for a lump sum cash 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.
Upon acceptance of a OIC, the taxpayer may no longer designate offer payments to any specific tax liability covered in the offer agreement.
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.
The offer in compromise requires a lot of skill because reviewed by several layers of Internal Revenue Service..
I should know, I am former IRS agent and teaching instructor of the offer in compromise.
Call us today for a free initial tax consultation.
IRS Tax Issue Problems + Payroll Tax Debt + IRS Trust Fund Taxes Debt + Offer in Compromise + reduce & Resolve IRS Tax Debt
by Jim Magary | Jan 11, 2016 | Tax Help
Since 1982 we have been resolving back tax debt, former IRS agents and managers A+ rated BBB. Affordable Options!
If you owe IRS back taxes and are self-employed call us today and learn how to manage your IRS tax debt. It’s very tough for self-employed people to pay their current expenses and their taxes at the same time. Most of the people that owe back taxes are self-employed individual struggling to pay their bills.
There are variety of tax solutions to go ahead and resolve your IRS problem.
Upon calling us we will review your situation and provide various options for you to permanently and immediately get rid of your IRS case.
We have over 65 years of direct IRS work experience in the local, district, and regional tax offices of the IRS. we also have over 206 years of professional tax experience and one of the most affordable, trustworthy, and knowledgeable firms in the industry.
We are the affordable tax firm.
Not only were we former IRS agents and managers were also supervisors, teaching instructors. We also were on-the-job instructors. We know the system inside and out and know all the IRS settlement theories and every available option to resolve tax debt.
Two things you need to be cognizant about.
All tax returns have to be filed. Part of the Internal Revenue Service process is to make sure that each taxpayer who owes back taxes are fully compliant with tax returns. If you have not filed your back tax returns you can contact us and we can prepare all back taxes with or without tax records. We are tax reconstruction experts.
Even if you are self-employed with no records there are ways to reconstruct your tax return. So remember to be in good favor with IRS you must be full compliant with estimated tax payments and filing,
IRS will want to current financial statement. The Internal Revenue Service closes cases out based on taxpayers ability to pay and the two things they tend to look at are assets and income. IRS does not necessarily care about all your liabilities just your current necessary monthly expenses.
As a general rule IRS will review your current financial statement on form 433F before closing out a case.
As a general rule IRS’s two major categories they put clients and who have not paid back taxes. As a general review rule you’ll either be placed into a tax hardship or be asked to make a monthly payment. Your current financial statement will be the determining factor that’s why it is very important to have an experienced tax professional beer IRS representative.
When you call our offices for free initial tax consultation we will walk you through the process of settling your case with Internal Revenue Service.
More importantly if you are self-employed it is critical you start to make estimate payments to let IRS know you are determined to rehabilitate yourself.
Call us today for a free initial tax consultation and speak to a true IRS tax expert.
Self Employed & Owe IRS Taxes + Affordable IRS Representation + IRS Tax Help
