Back Tax – Former IRS – Ft.Lauderdale, Miami, West Palm, Florida Keys – Back Tax Solutions

by Fresh Start Tax | Feb 5, 2013 | Tax Help

Back Tax – Former Local IRS – Ft.Lauderdale, Miami, West Palm, Florida Keys   954-492-0088

 
If you are having issues on any back tax matters call us today for a free initial tax consultation.
If you owe back taxes or have not filed back tax returns we are your local South Florida tax experts who have resolved hundreds of hundreds of South Florida cases.
Being former IRS agents in the South Florida office gives us a tremendous advantage over other tax firms.  You can come by and visit our office for a free tax consultation.
You will consult directly to tax attorneys and CPAs or former IRS agents, managers and instructors on your back tax issues.
 
We have over 206 years of professional tax experience in over 60 years of working directly for the Internal Revenue Service and the local South Florida IRS offices.
 
If you have any issues with your back taxes with either the Internal Revenue Service or the State of Florida contact us today for immediate and permanent tax resolution on your back tax issues or your back tax problems.
All our work is done in-house and we are A+ rated by the Better Business Bureau. We have been serving South Florida since 1982.
 
The new fresh start program by Internal Revenue Service can help you resolve your back tax problems
 
The new Fresh Start Program by the Internal Revenue Service:
The Internal Revenue Service six months ago made major changes in the way they deal and handle taxpayers that all back taxes.
The new Fresh Start program is going to help out thousands and thousands upon taxpayers to go ahead and more readily and easily handled their IRS tax problems. IRS has made dealing with back taxes a much easier.  Contact us directly today for more details.
Please find  below changes made in back taxes due to the new Fresh Start Program.
 
IRS Federal Tax Lien Thresholds.
 
The IRS will significantly increase the dollar thresholds when federal tax liens are generally filed.
The new dollar amount is in keeping with inflationary changes since the number was last revised. Currently,  federal tax liens are automatically filed at certain dollar levels for people with past-due balances on back taxes.  IRS must file tax liens if a tax liability is over $10,000.
A federal tax lien gives the IRS a legal claim to a taxpayer’s property for the amount of an unpaid tax debt. Filing a Notice of Federal Tax Lien is necessary to establish priority rights against certain other creditors.
Usually the federal government is not the only creditor to whom the taxpayer owes money.
A federal lien informs the public that the U.S. government has a claim against all property, and any rights to property, of the taxpayer. A federal tax lien is different from a federal tax levy.  For more information on this go to our website.
This includes property owned at the time the notice of lien is filed and any acquired thereafter. A federal tax lien can affect a taxpayer’s credit rating, so it is critical to arrange the payment of taxes as quickly as possible.
 
IRS Federal Tax Lien Withdrawals to help Back Tax Problems


The IRS will also modify procedures that will make it easier for taxpayers to obtain lien withdrawals.
Federal Tax Liens will now be withdrawn once full payment of taxes is made if the taxpayer requests it. The IRS has determined that this approach is in the best interest of the government.
In order to speed the withdrawal process, the IRS will also streamline its internal procedures to allow collection personnel to withdraw the liens.
 
Direct Debit Installment Agreements and Federal Tax Liens
 
The IRS is making other fundamental changes to liens in cases where taxpayers enter into a Direct Debit Installment Agreement .
For taxpayers with unpaid assessments of $25,000 or less, the IRS will now allow lien withdrawals under several scenarios:
Lien withdrawals for taxpayers entering into a Direct Debit Installment Agreement.
The IRS will withdraw a lien if a taxpayer on a regular Installment Agreement converts to a Direct Debit Installment Agreement.
The IRS will also withdraw liens on existing Direct Debit Installment agreements upon taxpayer request.
Federal Tax Liens will be withdrawn after a probationary period demonstrating that direct debit payments will be honored.
This lowers user fees and saves the government money from mailing monthly payment notices.
 
IRS Installment Agreements and Small Businesses on Back Tax


The IRS will also make streamlined Installment Agreements available to more small businesses. The payment program will raise the dollar limit to allow additional small businesses to participate.
Small businesses with $25,000 or less in unpaid tax can participate.
Currently, only small businesses with under $10,000 in liabilities can participate. Small businesses will have 24 months to pay.
 
Streamlined installment agreements on Back Tax


The streamlined Installment Agreements will be available for small businesses that file either as an individual or as a business.
Small businesses with an unpaid  tax assessment balance greater than $25,000 would qualify for the streamlined Installment Agreement if they pay down the balance to $25,000 or less.
Small businesses will need to enroll in a Direct Debit Installment Agreement to participate.
 
Offers in Compromise or  IRS Tax Debt Settlements
 
The IRS is also expanding a new streamlined Offer in Compromise (OIC) program to cover a larger group of struggling taxpayers.
This streamlined OIC is being expanded to allow taxpayers with annual incomes up to $100,000 to participate.  Tax Participants must have tax liability of less than $50,000, doubling the current limit of $25,000 or less.
Compromises or Tax Debt Settlements are subject to acceptance based on legal requirements. Call us for more details.
An offer-in-compromise ( OIC ) is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed.
Generally, an offer will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement. The IRS  will looks at the taxpayer’s income and assets to make a determination regarding the taxpayer’s ability to pay.
Call us today to see if you qualify for an offer in compromise or tax debt settlement. Call us today for more details. A offer in compromise should not be filed by anybody who is not qualified in the preparation and negotiations of offers in compromise.
We have on staff former IRS agents we have worked hundreds and hundreds of offers in compromise. Call us today to find out the truth about tax debt settlements.

Back Tax – Former IRS – Ft.Lauderdale, Miami, West Palm, Florida Keys – Back Tax Solutions

How to Resolve Tax Problems – Former IRS Agents, Experts in Tax Resolution

by Fresh Start Tax | Feb 1, 2013 | Tax Help

How to Resolve Tax Problems – Former IRS Agents, Experts in Tax Resolution    1-866-700-1040

We are comprised of tax attorneys, CPAs and former IRS agents, managers and tax instructors.
Call us today for free tax consultation and speak directly to a tax attorney, CPA or former IRS agent. Stop the worry and find out how to permanently and immediately resolve your tax problem.
We have over 206 years of professional tax experience and over 60 years working directly for the Department of Treasury, Internal Revenue Service in positions as agents, managers, and former appellate agents,
We also taught tax law and IRS’s former IRS agents.
 Resolving tax problems
There are multitudes of ways to result tax problems. The very first thing any taxpayer should do is to contact a certified tax professional to find out the different options that are available to resolve the particular issue.
 Tax Problems are usually broken up into four main areas.
Those areas are usually in the either in:
1. filing,
2. in audit, or
3. settlements.
4. appeals.
Each one of those particular tax problems require a different skill set.
Fresh Start Tax LLC is uniquely equipped having former IRS agents in the areas of audit, collections and appeals.
We also have on staff tax attorneys for those in need of litigation or legal work involving the resolution of more complicated tax problems or tax issues.
Topic of IRS Tax Audits
What is an IRS  Tax Audit.
An IRS audit is a review or tax examination of an organization’s or individual’s accounts and financial information to ensure information is being reported correctly, according to the tax laws, to verify the amount of tax reported is accurate.
Publication 556, Examination of Returns, Appeal Rights and Claims for Refund explains the audit process in more detail.
Tax Audit Selection by the Internal Revenue Service
IRS audits approximately 1% of all tax returns that are filed. IRS has certain audit mandates that are given to Congress and part of the IRS mandate is to make sure they fulfill their duty and mission to Congress.
If you have nothing to worry about we would suggest you go into the Internal Revenue Service on your own.
If you feel you have any skeletons in the closet and that there are things that may be suspect, it is always best to contact a true IRS expert in dealing with the Internal Revenue Service.  It is always best to hire former IRS agents who knew the tax policies, tax settlement procedures and tax codes. Let a former IRS agent do your fighting.
Selecting a return for audit does not always suggest that an error has been on your tax return.
Tax  Returns are selected using a variety of methods, including:
Random selection and computer screening. Sometimes returns are selected based solely on a statistical formula.
Document matching. When payor records, such as Forms W-2 or Form 1099, don’t match the information reported.
Related examinations. Tax Returns may be selected for audit when they involve issues or transactions with other taxpayers, such as business partners or investors, whose returns were selected for audit.
Tax Audit Methods  and procedures
An  tax audit may be conducted by mail or through an in-person interview and review of the taxpayer’s records.
The interview may be at an IRS office (office audit) or at the taxpayer’s home, place of business, or accountant’s office (field audit).
The IRS will tell you what records are needed. Audits can result in no changes or changes. Any proposed changes to your return will be explained.
Tax Audit Notification  by the Internal Revenue Service
Should your tax return, business or personal,  be selected for audit, you will be notified in two ways:
1. By mail, or
2. By telephone
In the case of a telephone contact, the IRS will still send a letter confirming the audit.
E-mail notification is not used by the IRS. If you ever receive an email notification regarding your tax return please be aware this is not from Internal Revenue Service.
This is a scam and should be reported to Department of Treasury
Your Rights During an IRS Tax Audit
Publication 1, Your Rights as a Taxpayer, explains your rights as a taxpayer as well as the examination, appeal, collection, and refund processes. These rights include:
a. A right to professional and courteous treatment by IRS employees.
b. A right to privacy and confidentiality about tax matters.
c. A right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided.
d. A right to representation, by oneself or an authorized representative.
e. A right to appeal disagreements, both within the IRS and before the courts.
While this is just a small piece of how to resolve your IRS tax problems, there are a voluminous amount of options to deal with each and every problem. By contacting true IRS tax experts you’ll find out how to affordably and with the greatest success be able to resolve your IRS problem and your tax situation.
Please contact us today for a  free tax consultation. Stop the worry in the panic today by using true experts  to permanently to resolve your tax problem.
 
How to Resolve Tax Problems – Former IRS Agents, Experts in Tax Resolution
 
 

Trust Fund Penalty – How to Defend Yourself – Former IRS Agents

by Fresh Start Tax | Feb 1, 2013 | Tax Help

Trust Fund Penalty – How to Defend yourself – 1-866-700-1040

How to save yourself from the Trust Fund Recovery Penalty
We are former IRS agents, managers and instructors who have over 60 years of direct working knowledge and experience with the Internal Revenue Service and the local, district, and regional IRS offices.
We have worked hundreds upon hundreds of trust fund recovery penalty cases. We know how to get results.
On staff are former IRS revenue officers who  use to set taxpayers up for the trust fund recovery penalties and former IRS appeals agents who know how to defend the trust fund penalty cases.
Call us today for free tax consultation and we will go over your specific case and see if there are any options available to you to go ahead and stop the trust fund recovery penalty.
 
The trust fund penalty code section
The Trust Fund Recovery Penalty (TFRP) is a penalty provided by IRC 6672 against any person required to collect, account for, and pay over taxes held in trust who willfully fails any of these activities.
The penalty is equal to the total amount of tax evaded, not collected or not accounted for and paid over to the Government. The penalty is applicable for many types of taxes, but the most common application of the TFRP is for unpaid employer’s taxes on Form 941.
The TFRP is not dis-chargeable in bankruptcy.
The trust portion of the employment taxes (Form 941) consist of the amount of withholding for the Federal Income Tax and for Social Security. The only way to fully protect yourself from the application of the TFRP is to always pay these taxes to the Government, even if you don’t have the funds for any other expenditure.
Don’t forget, the amounts withheld are not yours, you are holding those funds in trust for the Government!
 The assertion of the trust fund recovery penalty
For the assertion of the Trust Fund Recovery Penalty (TFRP), the IRS must establish that a person is “responsible” and also “willfully” failed to collect or pay over the trust fund taxes to the government.
Potential “responsible” persons include:
1. Officer or employee of a corporation,
2. Partner or employee of a partnership,
3. Corporate director or shareholder,
4. Employee of a sole proprietorship,
5. Surety lender,
6. Other person or entity outside the delinquent business organization.
A “responsible” person has:
1. Duty to perform,
2. Power to direct the act of collecting trust fund taxes,
3. Accountability for and authority to pay trust fund taxes,
4. Authority to determine which creditors will or will not be paid,
To determine whether a person has the status, duty and authority to ensure that the trust fund taxes are paid, the IRS considers the duties of the officers as set forth in the corporate by-laws as well as the ability of the individual(s) to sign checks.
In addition, the IRS determines the identity of the individuals who:
1. Hire and fire employees.
2. Exercise authority to determine which creditors to pay.
3. Sign and file the employment tax returns.
4. Control payroll/disbursements.
5. Control the corporation’s voting stock.
6. Make federal tax deposits.
Factors to consider as to “responsibility” include;
1. Whether the person had the ability to exercise independent judgement with the financial affairs of the business.
2. If a person is an officer or owns stock in the corporation, this cannot be the sole basis for “responsibility.”
3. If a person has the authority to signs checks, the exercise of that authority does not, in and of itself, establish “responsibility.”
 
The definition of willfulness
“Willfulness” means intentional, deliberate, voluntary, reckless, knowing, as opposed to accidental. No evil intent or bad motive is required.
To show “willfulness,” the IRS must show that a “responsible” person was aware, or should have been aware, of the outstanding taxes and either intentionally chose not to pay the taxes or was plainly indifferent that the taxes needed to be paid.
A “responsible” person’s failure to investigate or correct mismanagement after being notified that withholding taxes have not been paid satisfies the TFRP’s “willfulness” element. The payment of of net wages (wages minus the trust fund taxes) to employees when funds are not available to pay withholding taxes is a “willful” failure to collect and pay over under the trust fund taxes.
The payment of wages to employees over the government constitute “willfulness.”
If the IRS can show that you paid other creditors or directed others to pay other creditors after you became aware of the unpaid trust fund taxes, you have met the “willfulness” element for the application of the TFRP.
Again, for the assertion of the TFRP, the IRS must establish that a person is “responsible” and also “willfully” failed to collect or pay over the trust fund taxes to the government. Thus, you would first argue that you are not a “responsible” person; and if that fails, you will argue that you did not “willfully” fail to pay the trust fund taxes.
You must keep in mind that the courts have favored the IRS in the application of the TFRP.
If you were the sole shareholder, president and director of your corporation and had check signing authority; the TFRP will be applied against you for the trust fund taxes. You are liable, end of issue.
You have a chance to escape the application of the TFRP penalty when the IRS determines that you are a “responsible” person due to one specific factor and nothing more. If the IRS determined that you are a “responsible” person because you had check signing authority and nothing more, you can argue you that you were given check signing authority for the mere convenience of your employer.
You can explain that other individuals also had check signing authority. You will need to show that you had nothing to do with payroll.
You will need to obtain affidavits from other employees of the corporation stating that you had nothing to do with the finances of the corporation.
If the IRS determined that you are a “responsible” person because you were a shareholder of the corporation and nothing more, you can argue that you were a mere investor in the business and not involved in the day to day operation of the business.
You will need to show that you were not on the business premises.
Again, you will need to obtain affidavits from the employees of the corporation to collaborate your position.
If the IRS determined that you are a “responsible” person because you were a director of the corporation and nothing more, you can argue that you had nothing to do with the operation of the business.
You will need to obtain the corporate records to show when you were the director and what was discussed at the board of director’s meetings. You will need to show that you were not on the business premises.
Again, you will need to obtain affidavits from the employees of the corporation to collaborate your position.
If the IRS determined that you are a “responsible” person because you were related to a “responsible” person and nothing more. You will argue that you had nothing to do with the day to day operation of the business.
Again you will have to obtain affidavits from the employees of the corporation stating that you were not on the business premises and had nothing to do with the day to day operation of the business and not an owner or director of the business.
Shareholders
If the IRS determined that you are “responsible” person because you are a shareholder (but not the sole shareholder), were an employee and had check signing authority; you will need to argue that you had no decision making authority.
You will need to describe your duties as an employee and obtain affidavits from other employees that you were not involved in the day to day operations of the business.
If the IRS determines that you are a “responsible” person solely due to one of these factors, stock ownership, check signing authority or employment status; you will need to show that you had no authority over the financial affairs of the corporation.
You will need to obtain affidavits from the employees of the corporation to collaborate your position.
If the IRS determines that you are a “responsible” person due to a combination of factors, such as stock ownership, check signing authority or employment status; you will need to show that you had no authority over the financial affairs of the corporation.
You will need to obtain affidavits from the employees of the corporation to collaborate your position. With more factors against you, it will be more difficult for you to prove that you are not a “responsible” person.
Responsible persons
Once the IRS has determined that you are a “responsible” person and you can not persuade the IRS that you are not a “responsible” person; you will need to show that you did not “willfully” fail to pay the employment taxes.
If you paid other creditors after you became aware of the unpaid trust fund taxes, you have “willfully” failed to pay the employment taxes. On the other hand, if you made these payments because you were threatened with physical harm by the owner or director of the corporation, you can argue that you did not “willfully” fail to pay the employment taxes. Again you will need to prove your position with affidavits from the employees of the corporation and a police report to show physical violence.
In conclusion, if you are a non-owner employee of a corporation and do not want to be held liable for the TFRP; as soon as you become aware of the unpaid employment taxes, you need to inform the officers and directors of the corporation in writing of the problem and don’t sign any more corporate checks.
If your are given the choice of either paying other creditors or being fired; the choice is yours with consequences. If you pay the other creditors, you have “willfully” failed to pay the employment taxes.
If the taxes are not paid soon, you resign your position from the corporation and make your resignation in writing.
Further, if you were an officer and/or director of the corporation, you make sure that the public corporate records reflect that you no longer have these positions with the corporation. This may seem harsh, but this is the safest way to save yourself from the TFRP.
If the Revenue does not accept your arguments that you should not be held liable for the Trust Fund Recovery Penalty, he will mail to you Letter 1153 with with an agreement Form 2751. If you agree or let the 60 day appeal period expire, the Trust Fund Recovery Penalty will be assessed against you.
 If you do not agree with the revenue officer
If you do not agree with the Revenue Officer’s findings, you can appeal to the Appeals Division.
To appeal you will need to submit a protest to the Revenue Officer. In the protest, you would explain why you believe why you should not be held liable for the Trust Fund Recovery Penalty. Then your case would be forwarded to the Appeals Division, where the case would be assigned to an Appeals Officer/Settlement Officer.
The Appeals Officer reviews the case and schedules a conference with you. The conference can be either face to face or by telephone. You should prepare yourself for the Appeals conference by reviewing all of the facts and obtaining documentation that refutes the Revenue Officer’s facts, if you believe they are incorrect.
At the Appeals conference you will be given the opportunity to explain why you should not be held liable for the Trust Fund Recovery Penalty. At the Appeals conference should present your case in the best light for yourself with facts in your favor.
The Appeals Officer will consider your facts as you perceive them to be, the Revenue Officer’s perception of the facts and tax law pertaining to the TFRP.
Based on the facts, the Appeals Officer can concede the issue in full which means that you will not be held liable for the TFRP. The Appeals Officer can hold you liable for the full amount of the proposed TFRP and have the TFRP assessed against you.
The Appeals Officer also has the authority to settle the TFRP issue for a reduced amount known as a “hazards” settlement.
Only an Appeals Officer/Settlement Officer can resolve a case through a “hazards” settlement. AS “hazards” settlement is an intermediate resolution of an issue upon the fact that there is substantial uncertainty in the event of litigation as to how the courts would interpret and apply the law or as to what facts the courts would find.
Generally, this means that Appeals would settle the TFRP issue for a reduced amount, on a basis less than a 100% concession.
Examples of hazards of litigation
for example, if the proposed TFRP assessment by the Collection Division for the quarter ending 12/31/2010 was $12,000.00. The Appeals Officer/Appeals Settlement Officer based on “litigating” hazards may proposes to you that he will settle the case for $8,000.00, if you agree and sign the agreement Form 2751. After you sign the Form 2751 for $8,000.00; the $8,000.00 TFRP will be assessed. If you do not agree, the full $12,000.00 will be assessed.
Trust Fund Penalty – How to Defend Yourself  – Former IRS Agents

Small Business Tax Problems – File, Owe, Audit, Settle – Former IRS Agent

by Fresh Start Tax | Jan 31, 2013 | Tax Help

 
Small Business Tax Problems – File, Owe, Audit, Settle – Former IRS Agent     1-866-700-1040
Small Business Tax Problems and Tax Resolutions

We are comprised of Tax Attorneys, CPAs, and former IRS agents, managers and instructors.
We have over 206 years of professional tax experience and over 60 years of working directly for the Internal Revenue Service and the local, district, and regional offices of the Internal Revenue Service.
We taught tax law at the regional  IRS training centers. We know all the tax policies, settlement procedures and tax options available to all taxpayers.
If you are a business and have any type of IRS problems please contact us today for a free tax consultation and see if we can stop the worry today.
We are A+ rated by the Better Business Bureau and are without complaint.
Filing Back Tax Federal or State Tax Returns
If you need to file any back tax returns we can go ahead and prepare those documents and work out settlement agreements with Internal Revenue Service. We can prepare back tax returns with little or no records. We are experts in tax reconstruction.
If you owe back taxes to IRS or to State governments we can get you an installment agreement or work out tax settlement package called and offered a compromise.
IRS or State Tax Audits
If you are about to go undergo a tax audit or a audit report has been issued, we can go ahead and be your representative and appeal any decision the government state or federal.
Settle your back taxes
IRS tax settlements come in the form of offer in compromises. We can go over the three different options and explain the settlement procedures and how they can work for you So you can  settle your case for the lowest amount allowed by law.
IRS Offer in Compromise –  IRS tax settlements

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:
a. Ability to pay,
b. Income,
c. Expenses and,
d. Asset equity.
Offer and compromises require the help of true tax professionals. As a former IRS agent and  teaching instructor  i can tell you this, very few offer in compromises are accepted by individual taxpayers who submit them on their own.
Also you should have your offer in compromise  qualified before submitting it to the Internal Revenue Service.
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.
You should explore  all other payment options before submitting an offer in compromise. The Offer in Compromise program is not for everyone.
Make sure you are eligible before you file or settle your case.
Before IRS can consider your offer, you must be current with all filing and payment requirements.
Please note:
You are not eligible if you are in an open bankruptcy proceeding.
Submitting  your offer
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). You can also view the “Complete Form 656” video.
Your completed offer package must 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. $150 application fee (non-refundable); and
Initial payment (non-refundable) for each Form 656.
Select a payment option that fits your individual need
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  offer in compromise process
While your offer is being evaluated:
a. 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);
b. A Notice of Federal Tax Lien may be filed;
c. Other collection activities are suspended;
d. The legal assessment and collection period is extended;
e. Make all required payments associated with your offer;
f. You are not required to make payments on an existing installment agreement; and
g. Your offer is automatically accepted if the IRS does not make a determination within two years.
Contact us today to get immediate and permanent results if you have any type of small business tax problem.
We could file all your back tax returns workout on IRS or State tax settlement or represent you on any pending or tax  problem that is ready for appeals.
Contact us today for a free tax consultation.
 
Small Business Tax Problems – File, Owe, Audit, Settle – Former IRS Agent
 

How to Fix Tax Problems – Former IRS Know ALL the Solutions

by Fresh Start Tax | Jan 31, 2013 | Tax Help

 
How to Fix Tax Problems – Former IRS Know ALL the Solutions 1-866-700-1040    Find out your options

If you want to know how to fix tax problems you should go to the very best source possible. It only makes perfect sense  to contact former IRS agents, managers and instructors.
We have over 60 years of direct working knowledge and experience with the Internal Revenue Service as agents ,managers and instructors who taught tax law at the IRS.
Also on staff are former appellate agents and tax attorneys.
All work is done in-house and you can call us today for a no cost professional tax consult.
We can go over all your tax options and explain to you how you can fix your tax problems. So stop and the stress and hear the truth on the best and easiest way to fix your individual tax problem.
How to fix tax problems if you owe the IRS a tax debt – Offers In Compromise
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 liabilities can be fully paid through an installment agreement or other means, the taxpayer will in most cases not be eligible for an OIC. Call us for more details on this.
In order to be eligible for an OIC, the taxpayer must have:
1. filed all tax returns,
2. make all required estimated tax payments for the current year, and
3. make 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 unless the amount offered by the 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. This other property includes IRA and pensions.
In addition to property, the RCP also includes anticipated future income, less certain amounts allowed for basic living expenses. For complete list of basic living expenses please check out the national and regional standards on our website.
The IRS may accept an OIC based on three grounds.
1. 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,
2. 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. 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.
Offers in Compromise based on Doubt as to Collectibility
1.use the most current version of Form 656 (PDF), Offer in Compromise, and
2. must also submit Form 433-A (PDF), Collection Information Statement for Wage Earners and Self-Employed Individuals, and/or Form 433-B (PDF), Collection Information Statement for Businesses.
Taxpayer submitting offers in compromise based on Doubt as to Liability
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 and/or Form 433-B.
In general, a taxpayer must submit a $150 application fee with the Form 656. You should 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.
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.
Exceptions
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.
 
Options to pay off the offer in compromise
Taxpayers may choose to pay the offer amount in a lump sum or in installment payments.
 The lump sum payment offer
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.
The periodic payment offer
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.
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
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.
Defaults of offers in compromise
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 the IRS reject your offer in compromise
If the IRS rejects an OIC, then the taxpayer will be notified by mail. The 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.
Appeals and rejected offer in compromise
The appeal must be made within 30 days from the date of the letter.
In some cases, an  offer in compromise 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.
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