IRS Tax Debt Settlement – Offer in Compromise – Former IRS Offer in Compromise Specialist
Fresh Start Tax – Joe Dimino and Michael D. Sullivan

1901 Newport Boulevard
Suite 350
Costa Mesa, CA 92627  Costa Mesa, CA 92627  1- 866-700-1040

IRS accepts about 14,000 Offers in Compromise a year. 57,000 are submitted to the IRS.With the new Fresh Start Program instituted by the IRS we can expect many more offers being filed in the future. the program will help many struggling taxpayers.

A IRS Offer is sometimes called a IRS Tax Debt Settlement. As a Former IRS Agent and Teaching instructor with the IRS I use to teach the program to new Revenue Officers. Modesty speaking I am a true expert when it comes to IRS Tax Debt Settlements.

There are many companies that advertise “We can settling your case for pennies on a dollar.” While that statement is very true, I would caution any taxpayer to make sure the company you are dealing with is an experienced and trustworthy tax firm because our market is saturated with scam artists.

Check out BBB ratings and check on the person directly who will be handling your case.

My advice to the public is to have your offer pre-qualified before submitting your Offer in Compromise for a IRS Tax Debt Settlement.

Fresh Start Tax LLC will do just that.

Before we take dollar one, we will tell you whether you are a valid offer candidate before you spend a nickel.

Contact us today and hear the truth. We are A plus rated by the BBB.

 What is an Offer in Compromise or a IRS Tax Debt Settlement

An offer in compromise  is an agreement between a taxpayer/business and the Internal Revenue Service that settles the taxpayer’s tax liabilities for less than the full amount owed.

If the tax liabilities can be fully paid through an installment agreement or other means, the taxpayer will in most cases not be eligible for an OIC. For information concerning tax payment options, including installment agreements call us today. 1-866-700-1040.

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. this is known as 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, IRA’s, pension plans and other property and assets of the taxpayer.

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

The IRS may accept an OIC based on three grounds.

First.

Acceptance of an Offer is permitted if there is doubt as to liability. This ground is only met when genuine doubt exists that the IRS has correctly determined the amount owed. you must have proof that the liability is incorrect.

Second.

An acceptance of an Offer is permitted if there is doubt that the amount owed is collectible. This means that doubt exists in any case where the taxpayer’s assets and income are less than the full amount of the tax liability.

Third.

An acceptance  of an Offer is permitted based on effective tax administration.

An offer in compromise may be accepted based on effective tax administration when there is no doubt 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. These are rare.

 How do you calculate the Tax Settlement or the Offer

Calculating the Offer in Compromise

To determine the acceptable minimum offer amount, the IRS will look at the taxpayer’s income and available assets, and compare it to their monthly expenses and other secured debts; however, not all expenses qualify.

For example, non-secured debt, such as credit card debt, will not be taken into account when calculating your offer.  The IRS imposes a cap on qualified expenses, such as housing and transportation costs, to limit the amount you can claim, even if your actual expenses are much greater. There is a National Standard IRS embraces.

The value of any assets the taxpayer currently has, such as a home, car, 401K, or checking account, will be automatically calculated into the minimum offer amount. Those  taxpayer who have a valuation of assets exceeding their tax liability are not good candidates for an offer in compromise, since the IRS will deem the taxpayer capable of paying the entire liability. If your assets exceed the amount of tax you owe, you are wasting your time filing an offer in compromise.

This does not mean, however, that one should liquidate their assets prior to submitting an offer. The IRS may or will consider these recently sold assets to be dissipated assets which could and will have an adverse effect on the final offer amount.

What is a Dissipated Asset.

Dissipated assets are anything of value that you had and subsequently sold, which could have satisfied your tax liability.

An example.

The sale of a business or car could be a dissipated asset. If the proceeds from the sale were spent on something other than your tax liability, and are no longer available to you, the IRS may add the value of the dissipated assets to your minimum offer amount.Check with us if this is the case.

Dissipated assets and their treatment can be difficult for many taxpayers to understand. Treatment of assets is an important factor when the IRS determines the viability of an offer in compromise. Therefore, one mis-characterized asset, or one that is not accompanied by proper explanation can cause an offer in compromise to be rejected.

Call us today and find out if and how you can qualify for a settlement with the IRS.

Call 1-866-700-1040 for a no cost consultation.