Last year 56,000 offers in compromise/tax debt settlements were filed with the IRS and 27% were accepted. Most of those that were accepted were filed through professional tax firms.

With the advent of the NEW Fresh Start Program, the filing of Tax Debt Settlements will go through the roof. The back log right now is at 7,700.

I am a Former IRS Agent and Teaching Instructor with the IRS.

I have reviewed hundred and hundreds of offers in compromise while working at the IRS. Being in private practice for over 27 years I have seen the results of many failed offers in compromise due to the pure lack of understanding about the program itself.

With the new Fresh Start Program, the IRS is finally trying to help struggling taxpayers. The attitude prior to the new program was “deny the offer.” Because Offers in Compromise or Tax Debt Settlements take so long to work and they get reviewed by supervisors,  the typical IRS Agent would reject the offer and any grounds. The taxpayer not knowing better would quit the process. The IRS lost billions of dollars in revenue because it failed to properly facilitate the program.

With the inception of the the new Fresh Start Program hopes are high that the taxpayers burdened by tax debt will be able to finally settle there cases.

As a side note.

Do not submit your offer in compromise unless a tax professional pre-qualifies the offer. You will be wasting your time and lots of money unless you know you got a good chance of acceptance. We will not submit an IRS tax debt Settlement at Fresh Start Tax LLC unless there is an excellent chance of acceptance. 1-866-700-1040.

Much is written about Offers in Compromise, but follow these tax offer tips and you will have a significant chance of the IRS accepting your tax debt settlement

Throughout the course of our representation for hundreds of clients, we find ourselves engaged in conversations with the IRS Agents who run the offer program in Holtsville, New York and other District and Regional Office. We queried many of them.

We would ask, “Why are most offers returned or rejected?”

Here are some points the IRS offer specialist agent made:

A.  Most taxpayers simply do not understand the concept of the offer. They submit an offer in compromise or a tax debt settlement simply because the program is available, having no idea of the assets and income requirement. Partial blame is geared towards false advertising to be the cause of these rejections. “Pennies on the dollar” has caused a frenzy of “everybody can settle.” IRS has strict qualification rules.

B. Believe it or not, many individuals only have one spouse sign the offer when both spouses are required to sign. As a result the offer must be reject by the IRS.

C. Many taxpayers do not send in the 20% of the offer required along with the Offer in Compromise. Some offers require the 20% payment down with the OIC. If the IRS technician  sees the 20% is not attached, they simply return the Offer in Compromise.

D. A number of taxpayers fill out the form 656 incorrectly. The 656 is a legally binding document. If it is all not filled out correctly, the IRS must return the Offer in Compromise. All required blocks must be appropriately completed.

E. Some do not apply the income and expense formulas correctly. Different offers require different formulas. Some use a 48 multiplier and some use a 60 multiplier. Therefore the offer calculations are incorrect and the offer cannot be processed. This is the most common error.

F. On periodic offers, some individuals only send in one periodic payment and fail to comply after the offer in compromise has been submitted. Periodic offers in compromise require the taxpayers to make continued payments until the offer is work and accepted. The IRS simply rejects the offer at this point.

G. Some individuals have filed for bankruptcy and the IRS cannot work the Offer in Compromise.

H. Some of the taxpayers did add the values of all their assets. The IRS technician stated that many did not include IRA or pension monies because taxpayers thought they were excluded.

I. The 433 OIC is a very complicated form to complete. With that said the Offers were rejected because the Financial statements were inaccurate and did not make sense.

J. Many taxpayers simply did not calculate the correct math for acceptance. Those that submitted the 433B did not explain the carry overs to the 433A properly.

Understanding the process of a IRS Tax Debt Settlement

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 of the IRS receipt date.

 All accepted offers are a matter of public record and can be inspected in the Regional Office of the IRS. Appointment can be made to view those accepted cases.

Call us today for a free tax consult. 1-866-700-1040

IRS Tax Debt Settlement -Tax Attorneys, Lawyers – Get your Offer in Compromise Accepted