by steve | Oct 1, 2009 | Tax Help, Uncategorized
YOU CAN MAKE PAYMENTS TO SETTLE YOUR CASE!!!!!!!!!!!!!!!!!!!!!!!!
Did you know that you can settle your case and make payment terms? The IRS offers three programs in which you can settle your case. Which is best for you?
The first program is a Lump Sum Settlement Program. This program allows the taxpayers to pay the offered amount in a short period of time in order to totally get this behind them . This is called the “Lump Sum Cash Offer”. The payments are due in five or less installments and a 20% payment must be included with the offer.
Here are the pros and cons. The pros are that you get rid of your case as soon as you give them the money. The IRS is off your back, and your lien gets released as soon as the check is cleared. Make sure the lien gets removed from your credit report.
The con is huge! The IRS does not accept the Offer, they keep the money and the case is still open. Caution should be used before the filing of this offer. The IRS will work this case as though it is brand new and now they have all your financial data. You can however, refile another offer. You could change what the IRS did not like on your first offer, then resubmit. This usually works.
by steve | Oct 1, 2009 | Tax Help, Uncategorized
There are certain offers on cases that the IRS cannot accept. Though they are rare, here is a partial list of some of these types of cases:
They usually involve cases that are controlled by the Department of Justice.
The taxpayer’s liability for part or all of the periods are in litigation.
The federal liability for all or part that the taxpayer owes has been reduced to a federal judgment.
The offer received by the IRS is for tax periods that cover restitution that was court ordered. The IRS cannot modify the terms of any court order whatsoever.
The IRS has a civil or criminal prosecution pending against the taxpayer and those cases are already with the Department of Justice or the U.S. Attorney’s office.
The case was closed by Criminal Investigation and there is an indicator on that specific account that restitution was ordered. Counsel office must approve any action.
The offer is returned based on the collection division review.
Any case that has been high profile, in the newspapers and have public appeal are usually turned down by IRS due to public opinion of the agency, and rightly so.
by steve | Oct 1, 2009 | Tax Help, Uncategorized
How many types of OIC exists?
There are three grounds on which the IRS accepts an OIC. This is based on policy statement P-5-100.
Doubt as to Collectibility: The goal of this Offer is to achieve the best possible settlement for the Federal Government. Also, they want to settle in the earliest possible time with the least cost to the government. They set the rules.
Doubt as to Liability: The goal of this Offer is to make sure the liability is correct. There are many times, that because of various legal issues, the assessment that was made by Internal Revenue Service itself was incorrect. This Offer allows the taxpayer a chance to have the IRS reexamine the case to make sure the assessment is, in fact, correct.
Effective Tax Administration: The goal of this Offer is based on a case by case basis. Due to extraordinary circumstances, it is best for the government to settle this case. These cases usually involve sickness or other life threatening situations. They are rare, but possible when the situation exist.
by steve | Oct 1, 2009 | Tax Help, Uncategorized
Why does the IRS accept Offers in Compromise or settle with the taxpayer?
The federal government, just about like anyone else you may owe money to, has various business situations in which they cannot collect the debt. The IRS has a system in place. It is a formal agreement in which the federal government has the authority to compromise the full amount of the tax because a situation exists that the IRS can collect more money in the long run by settling the tax bill. So, the OIC is a formal agreement that binds the government once the agreement is signed. You could win the lottery the next day, however the agreement is still binding.
The Authority of Law in this matter:
In case you are a legal buff, Section IRC 7122 whereas the Commissioner of the IRS, under Treasury Regulation 301.7122-1 has the authority on one of three grounds to settle these cases.
by steve | Sep 21, 2009 | Tax Help, Uncategorized
For the tax year 2008, there were 768,168 federal tax liens that were filed on taxpayers in the United States. Most of those liens will only be released by full payment, the accepted OIC that is paid in full, or by statue expiration. There is more than a 10% jump in the filing of federal tax liens over the previous year.
A note to all of you in blog land, because an offer is accepted, does not release the federal tax lien. It must be paid in full.
by steve | Sep 21, 2009 | Tax Help, Uncategorized
The IRS Extends Deadline for Disclosing Hidden Offshore Accounts.
WASHINGTON ? The Internal Revenue Service today announced a one-time extension of the deadline for special voluntary disclosures by taxpayers with unreported income from hidden offshore accounts. These taxpayers now have until Oct. 15, 2009.
Under special provisions issued in March, taxpayers with these hidden accounts originally had until Sept. 23, 2009 to come forward. Those taxpayers who do not voluntarily disclose their hidden accounts by the new deadline face much harsher civil penalties, where applicable, and possible criminal prosecution.
IRS officials decided to extend this deadline after receiving repeated requests from tax practitioners and attorneys around the country following an influx of taxpayer requests. By extending the deadline for a short period of time, the IRS is providing relief for those taxpayers who had intended to come forward prior to the deadline, but faced logistical and administrative challenges in meeting it. The extension will allow tax preparers and attorneys the necessary time to interview and advise their backlog of taxpayers with these hidden accounts, and prepare the necessary paperwork to qualify for the special penalty provisions.
The IRS also announced that there will be no further extensions.
