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Offer In Compromise : Will IRS Settle For Pennies on a Dollar * Ask Former IRS Agent + Ft. Lauderdale, Miami, Palm Beaches, Boca Raton, Pompano Beach

by | Nov 1, 2018 | Tax Help

Fresh Start Tax

 

As a former IRS agent and teaching instructor and a national expert, I am asked this question hundreds of times a year,” Will IRS settle for pennies on the dollar?”

 

The answer flat out is yes, but you better read the rest of the story.

For the record, we are a local South Florida tax firm that has been practicing since 1982 are former IRS agents worked out of the South Florida IRS offices.

There are hundreds or maybe a thousand firms promising IRS will settle your tax debt for pennies on the dollar. I’m trying to warn the general public not to be ripped off.

Most firms want you to believe immediately there is a tax debt settlement in your future and that’s why they charge larger monies larger retainers all for the promise of settlement.

There are many scrupulous companies out there that simply take your money and you have a case that has no chance of settlement.

I know because I receive hundreds of calls a year about tax resolution firms that take money from suspecting taxpayers hoping to settle their debt only to find out they have been ripped off.

Make sure this does not happen to you.

A simple call to our office, free tax consultation, will tell you the truth about is the offer in compromise program right for you. IRS has strict rules about an IRS tax debt settlement.

Just so you know the answer to the initial question, how much will IRS take for an offer in compromise, there is no set standard amount of what the IRS will accept for your offer in compromise to settle your tax debt, it is all decided by formula.

And there is a very exacting settlement formula  to settle your tax debt for pennies on the dollar.

When you call us today will explain that formula to you. As a general rule IRS is looking for your current income expenses and your assets. IRS doesn’t much care for most of your liability including credit cards and debt to other parties IRS is mainly looking for asset-based areas and where they can collect the back tax.

Also it is very important to remember all your tax returns must be filed and on the IRS system before IRS will accept the offer in compromise.

If you want to know the truth about the offer in compromise program I am the person you need to speak to. Since 1982.

I am a former IRS agent and teaching instructor with my former boss of the offer in compromise program.

I know the system inside and out I worked it I’ve trained others and have accepted offers in compromise for the federal government. I’m a true IRS tax expert on the offer in compromise.

I am a true IRS tax expert, national speaker, and have been on FOXBusiness news and other outlets speaking about different matters about Internal Revenue Service.

There are many myths about the offer in compromise program.

There are strict standards that the IRS employee before they accept an offer in compromise. I know because I’ve both accepted offers in compromise taught new employees to accept the offer in compromise or reject them and I know the system inside and out.

I suggest that every client or taxpayer before they file an offer in compromise either do one of two things.

Number one, call a true tax expert who knows the offer in compromise inside out or number two, to fill out the IRS pre-qualifier tool for the offer in compromise.

If you’re calling a professional firm you want to make sure the representative has at least filed 100 offers.

It takes a lot of experience and knowledge to get an offer in compromise through. some are very simple and don’t need a lot of experience while others demand. expertise skill level.

The Internal Revenue Service spends several hours, much more than you think to accept an offer in compromise. As a general rule, the average agent can spend between 20 to 40 hours to accept an offer in compromise.

After that takes place, the revenue officer must convince their local supervisor, the area manager, and the General Counsel of Internal Revenue Service to accept the offer.

It literally goes back and forth in the system. Some exceptions do exist. Dollar amount has a lot to do in the direction your offer will take.

Why? because all offers and compromise are a matter of public record.

That public record is available at eight regional IRS offices in the United States.

Even though offers are open to public inspection only one person last year looked through the IRS offers in compromise files.

IRS is not made electronic copies for review. knowing that these files are public record believe it or not only one person last year visited a regional office to review the offer in compromise. This year no one has been to an office.

There is a base rule for Internal Revenue Service accepting an offer in compromise.

You must give IRS the total equity in all your assets before IRS will consider or contemplate the acceptance. Some exceptions exist, assets consist of houses, pension plans, stock, business valuations, IRS wants to make sure you’re actually borrowing the money to settle.

If you are interested in filing an offer in compromise you can call us today for a free initial tax consultation and I will walk you through the process of the true IRS debt settlement called the offer in compromise.

 

 Offer in Compromise FACTS:

IRS last year accepted approximately 30,000 offers in compromise in approximately 75,000 were accepted. The average settlement was $9500.

Don’t let this average settlement fool you, it’s based on an average of all the offers accepted.

Offers in compromise are excepted by formula not by judgment.

The basic formula are the total value of your assets times what you have left over a month on a current income and expense statement times the number of months left in the statute. Some exceptions do apply.

 

Due diligence that can be used by IRS. The dollar of your case drives the due diligence.

You want to make sure your financial statement is accurate.

IRS has a host of web-based tools that can search your assets, places were you work, your income, your real estate records, your car records, your business records, insurance records , financial statement you’ve given institutions, credit reports and financial statements you’ve given the credit companies.

The amount of due diligence that the IRS spends working on cases depend strictly on the dollar amount of the tax debt. If you over hundred thousand dollars IRS spends a great deal more honor offer case.

Make sure you are very honest in the submission of your offer in compromise

So. what is an offer in compromise, a tax debt settlement

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 consider your unique set of facts and circumstances:

• Ability to pay;
• Income;
• Expenses; and
• Asset equity.

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.

The Offer in Compromise program is not for everyone.

If you hire a tax professional to help you file an offer, be sure to check his or her qualifications.

Make sure you are eligible to file:

Before IRS can consider your offer, you must be current with all filing and payment requirements.

You are not eligible if you are in an open bankruptcy proceeding.

Use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.

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). Your completed offer package will include:

• Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms;

• Form 656(s) – individual and business tax debt (Corporation/ LLC/ Partnership) must be submitted on separate Form 656;

• $186 application fee (non-refundable); and

• Initial payment (non-refundable) for each Form 656.

Select a payment option for the IRS:

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. If your offer is accepted, you will receive written confirmation. Any remaining balance due on the offer is paid 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 process of the OIC

While your offer is being evaluated there are specific rules and guidelines:

• 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);
• A Notice of Federal Tax Lien may be filed;
• Other collection activities are suspended;
• The legal assessment and collection period is extended;
• Make all required payments associated with your offer;
• You are not required to make payments on an existing installment agreement; and
• Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.

If your offer is accepted: your blessed

• You must meet all the Offer Terms listed in Section 8 of Form 656, including filing all required tax returns and making all payments;
• Any refunds due within the calendar year in which your offer is accepted will be applied to your tax debt;
• Federal tax liens are not released until your offer terms are satisfied; and
• Certain offer information is available for public review by requesting a copy of a public inspection file.
If your offer is rejected
• You may appeal a rejection within 30 days using Request for Appeal of Offer in Compromise, Form 13711 (PDF).

If your offer is not accepted this appeal process many times is the best way to settle the tax debt as the appeals division is a little more lenient sometimes than the IRS revenue officer. Don’t be dismayed if your case goes to appeals. Many times the best settlements come while the case is in the Appellate Division.

Call us today for a free initial tax consultation and we will walk you through the system to get your offer in compromise accepted if you are a credible candidate for the program.

We only file offers in compromise if you are a suitable candidates.

Remember, offers in compromises are not for all people.

e your money to any firm unless you speak to the person and you truly understand how IRS will accept your financial statement and accept the offer in compromise.

 

Offer In Compromise : Will IRS Settle For Pennies on a Dollar * Ask Former IRS Agent + Ft. Lauderdale, Miami, Palm Beaches, Boca Raton, Pompano

Offer In Compromise : Will IRS Settle For Pennies on a Dollar * Ask Former IRS Agent + Ft. Lauderdale, Miami, Palm Beaches, Boca Raton, Pompano Beach

The Offer in Compromise, The Truth, Former IRS Agent, Michael D. Sullivan + Ft.Lauderdale, Miami, Palm Beaches, Boca Raton,Aventura

by | Oct 10, 2018 | Tax Help

Fresh Start Tax

 

The Truth about the Offer in Compromise, Former IRS Agent, Michael D. Sullivan

 

Being a former IRS agent and teaching instructor of the offer in compromise there are so many myths about the program it’s hard to keep up with.

MYTH

The majority of calls that I get or from taxpayers that believe that IRS is going to settle their tax debt because of the ads they see on TV the Internet and various marketing techniques.

While the offer in compromise is a true program offered by the Internal Revenue Service, approximately 32,000 Americans get their offers in compromise approved by Internal Revenue Service because they are true qualified candidates for the program. The majority do not get accepted.

The average settlement is $6500 per case in approximately 32% of all offers in compromise are accepted by the Internal Revenue Service.

Unfortunately there are many IRS debt settlement companies that take cases, make promises and their clients offer have no chance of going through the IRS system to settle their tax debt.

Many of these companies charge thousands of dollars and I hear all the stories as people call me after other companies have failed to perform. I warn any taxpayer who wants to hire a company to speak to the person who will be working their case before giving their money to any IRS debt settlement company. You should find out how many offers they have worked and get a gut feeling about what you think their level of expertise is. I would also suggest that you speak to somebody who’s worked for the Internal Revenue Service and knows the program inside and out.

Everybody should know that the Internal Revenue Service has an offer and compromise pre-qualifier tool and if they do not call a professional company they should walk through the pre-qualifier tool on IRS.gov.

So how does the offer in compromise get process through the Internal Revenue Service.

First of all, a reviewer looks at the offer to make sure the offer can be referred to a revenue officer. The offer in compromise must from a technical standpoint be filled out completely have all signatures and all key elements of the 656 in place.

The reviewer then pulls up a transcript to make sure all the tax returns have been filed. If the offer in compromise is not filled out correctly all tax returns not filed, the reviewer sends it back to the taxpayer.

Once it passes the test of the reviewer, the offer is then passed on to a revenue officer specialist who has been trained by the Internal Revenue Service what to look for and what can be accepted by the Department of treasury.

KEEP IN MIND

The offer in compromise is a binding contract or covenant between the Department of treasury and the taxpayer and is a true legal settlement and document.

Once the revenue officer who is the offer in compromise specialist looks at the financial statement that person will get a general sense of how they feel about the offer in compromise.

A GOOD OFFER TIP

Put a letter or an accompaniment document letting the reviewer know from the beginning why your client or taxpayer needs to have this offer accepted and any extenuating circumstances that may exist.

BIG OFFER TIP

It puts a idea in the mind of the revenue officer of the desperate situation that the taxpayer is going through. The reason this is important is that the revenue officer is only looking at a piece of paper is removed from the reality of the taxpayer.

The job of a true practitioner is to help your client.

So you must make the situation real to the Internal Revenue Service as to understand the effects of the burden of the tax liability.

As a former IRS agent revenue officer I would look at the offer, glanced through, it look at the numbers, look at the written statement and kinda have a feeling about the offer in compromise. It is very important for that initial review to ge well, the IRS offer specialist feel good about working the offer in compromise, it sets the tone.

Please keep in mind it is much easier for a revenue officer offer in compromise specialist to reject the offer in compromise because there is a lot of process work and due diligence that a person must do to accept the offer in compromise.

Not only do you as a revenue officer have to approve the offer but so does your manager, the regional manager and so does the district council of Internal Revenue Service for legal purposes.

Many people ask why this process is so extensive and why so much time is spent.

The answer is quite simple, all offers in compromise that are accepted by the Internal Revenue Service are open to public review for one year at certain regional tax offices so the public can review offers in compromise and see which cases IRS accepts and which cases they do not.

So you can expect the Internal Revenue Service to be very cautious and more importantly use the same standard to accept every single offer in compromise. Appearance is very important to the Internal Revenue Service

Once the revenue officer starts looking at the financial statement they pay a lot of time to three main things:

1. the assets,

2. the income, and,

3. the expenses claimed by the taxpayer.

ASSETS.

The revenue officer wants to make sure that they’re getting their full liquidated value as part of the basis for settlement to Internal Revenue Service.

IRS will discount your residence approximately 20% but IRS generally will never settle for less than full liquidation value of the assets of any taxpayer and/or business.

Also keep in mind assets includes IRAs, pensions, stocks, and values of businesses that the taxpayer may own.

Next the revenue officer will move on to the expenses claimed against income.

The revenue officer will compare the national, regional, and geographical standards of the cost-of-living are in every region of the United States and compare that to the income.

The IRS’s job is to make sure that the taxpayer is living well within their means before they will accept an offer in compromise.

The goal of the Internal Revenue Service is to make sure the taxpayer has to borrow money from third-party to pay the offer in compromise and to settle their tax debt. Any money in possession of the taxpayer in any savings account or checking account generally must be included in the offer in compromise.

( please keep in mind that exceptions exist in certain cases.)

Once the revenue officer is pretty certain that this is a doable or acceptable offer, it puts the offer through a series of financial tests to make sure the documentation on the financial statement is correct.

The IRS agent will spend approximately 20 to 40 hours to work an offer in compromise.

The Agent will do Google searches to check businesses and an individual’s name to find out if there are assets, it will use the accurate search engine to look for back assets, it will pull DMV records, pull courthouse records, and will use other search engines to make sure that this offer can be acceptable by the Internal Revenue Service.’s

One of the great sources that IRS can use is a credit report.

There is a plethora of information on a credit report and on large cases the revenue officer can and will pull a credit report up.

After the revenue officer is convinced this is a doable offer they will package up the case and send it to the manager for review and acceptance .

ANOTHER BONUS TIP

A taxpayer can file as many offers in compromise as they wish. Many times if an offer in compromise is rejected the first time the taxpayer should find out why the offer was rejected fix the errors or problems and resubmit the offer in compromise after a period of time when the problems and issues from the first offer have been resolved. learn your lessons from the first rejection and make them successful the second time around.

 

What to Do if the Offer is not accepted.

Keep fighting, do not give up!

In almost all cases we send an appeal and to get it to a third party who is not connected with the collection division.

We love the sending cases to and appellate officer who was a better and more balanced person to accept the offer in compromise.

If you have any question about your case or like us to review your offer in compromise or process it call us today for a free initial tax consultation.

You will hear the truth about the offer in compromise.

While there is so much more that I could write and can be included in this short blog these are the basic overviews of the IRS offer in compromise.

Please keep in mind I was a former IRS revenue officer teacher and instructor of the offer in compromise.