IRS Settlement Program for Back Taxes – Hear the Truth  1-866-700-1040

 
 
The Internal Revenue Service Offer In Compromise Program is the basic IRS settlement tool used by taxpayers to settle their IRS debt.
Settlement program for IRS has a 25% success rate for all those who file offers in compromise.
As a former IRS agent I have not only work this program but am a former IRS teaching instructor.
As a result of my years of experience at the Internal Revenue Service, I know all the settlement formulas, the settlement procedures, and the exact structure to make this work for any taxpayer who is a true candidate for the IRS settlement program.
 
 You should know from the start that not all taxpayers fit into the IRS settlement program.
 
IRS has a pre-qualifier tool and you will find that our website.
You should not engage any tax firm until they let you know that you are a true settlement candidate. Many internet tax firms rip thousands and thousands of taxpayers off by telling them ” we can settle for pennies on a dollar. ”
Make sure you know who you’re speaking to before engaging any tax firm to settle your IRS cases on back tax. Make sure you are speaking to a tax attorney, certified public accountant, and enrolled agent or a former IRS agent. with most  Internet firms they often have sales people try to convince you into an IRS settlement program. Be very cautious this does not happen to you  because you can  lose your upfront money.
 
We have over 60 years of direct working knowledge and experience with the Internal Revenue Service and the local, district, and regional tax offices of the Internal Revenue Service.
 
We will review your case for free and let you know whether you are a qualified settlement program candidate for your back taxes. Hear the truth from fresh start tax today.
 
 

What is the IRS settlement program

 
 
An offer in compromise or tax debt settlement program 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.
 

Eligibility

 
 
In order to be eligible for an 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 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. In addition to property, the RCP also includes anticipated future income, less certain amounts allowed for basic living expenses.
 
 

IRS may accept an OIC based on three grounds.

 
 
First.   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.
Second. 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.
Third.  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.
 
 

Submission of the IRS Offer in Compromise

 
 
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 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.
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.
 
 

Application fee for the IRS settlement program

 
 
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.
 
 

The lump sum payment settlement

 
Taxpayers may choose to pay the offer amount in a lump sum or in installment payments. 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 or 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 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.
 
 

Rejections of the IRS Settlement for Back Taxes

 
 
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. 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.
 
 

You can refile your IRS Settlement on Back Taxes if it is not approved

 
 
Remember you can file as many offers in compromise as you want. Taxpayers are not restricted whatsoever. If your first offer in compromise  is rejected learn from your mistakes and resubmit another offer correcting the issues in which IRS had problems with.
 
IRS Settlement Program for Back Taxes – Hear the Truth, Former IRS