Tax Attorneys and Tax Debt Relief — IRS Offer In Compromise

Your Online Source For Tax Attorneys, Tax Debt Relief, IRS Back Taxes Help and IRS Offer In Compromise

Deep In Debt - Call 1800 DEBT.COM (That's 1800 332-8266)
Tax Attorneys and Tax Debt Relief
Bankruptcy Alternatives
Tax Attorneys and Tax Debt Relief — IRS Offer In Compromise

Deep In Debt? Call 1800DEBT.COM
For a FREE Debt Consultation
That's 1800 332-8266

IRS Offer In Compromise Tax Debt Relief
<

What Is An Offer In Compromise

An offer in compromise (OIC) 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. Absent special circumstances, an offer will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement.

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 (RCP). The RCP is how the IRS measures the taxpayer’s ability to pay and includes the value that can be realized from the taxpayer’s assets, such as real property, automobiles, bank accounts, and other property. The RCP also includes anticipated future income, less certain amounts allowed for basic living expenses.

Taxpayers should beware of promoters’ claims that tax debts can be settled through the offer in compromise program for "pennies on the dollar".

Notice: Our toll-free 1800DEBT.COM number is primarily for consumers with credit card debt. The agencies that handle these calls and the programs that they offer, e.g., a Debt Management Plan and Debt Settlements, are not designed to handle tax debt. Many consumers with tax debt, however, also have credit card debt that they must also resolve. If you have credit card debt, by all means call 1800DEBT.COM (that's 1800-332-8266) for a FREE debt consultation. To resolve your tax debt, however, click here to contact a tax debt specialist.

Three Types of Offer In Compromises

The IRS may accept an offer in compromise based on three grounds:

1. Doubt as to Collectibility - Doubt exists that the taxpayer could ever pay the full amount of tax liability owed within the remainder of the statutory period for collection.

Example: A taxpayer owes $20,000 for unpaid tax liabilities and agrees that the tax she owes is correct. The taxpayer’s monthly income does not meet her necessary living expenses. She does not own any real property and does not have the ability to fully pay the liability now or through monthly installment payments.

2. Doubt as to Liability - A legitimate doubt exists that the assessed tax liability is correct. Possible reasons to submit a doubt as to liability offer include: (1) the examiner made a mistake interpreting the law, (2) the examiner failed to consider the taxpayer’s evidence or (3) the taxpayer has new evidence.

Example: The taxpayer was vice president of a corporation from 2004-2005. In 2006, the corporation accrued unpaid payroll taxes and was assessed a trust fund recovery penalty as a responsible party of the corporation. The taxpayer was no longer a corporate officer and had resigned from the corporation on 12/31/2005. Since the taxpayer had resigned prior to the payroll taxes accruing and was not contacted prior to the assessment, there is legitimate doubt that the assessed tax liability is correct.

3. Effective Tax Administration - There is no doubt that the tax is correct and there is potential to collect the full amount of the tax owed, but an exceptional circumstance exists that would allow the IRS to consider an OIC. To be eligible for compromise on this basis, a taxpayer must demonstrate that the collection of the tax would create an economic hardship or would be unfair and inequitable.

Example: Mr. & Mrs. Taxpayer have assets sufficient to satisfy the tax liability and provide full time care and assistance to a dependent child, who has a serious long-term illness. It is expected that Mr. and Mrs. Taxpayer will need to use the equity in assets to provide for adequate basic living expenses and medical care for the child. There is no doubt that the tax is correct.

Offer In Compromise Payment Options

In general, a taxpayer must submit a $150 application fee and initial payment along with the Form 656, Offer in Compromise. Taxpayers may chose to pay their offer in compromise in one of three payment options:

1. Lump Sum Cash Offer - Payable in non-refundable installments, the offer amount must be paid in five or fewer installments upon written notice of acceptance. A non-refundable payment of 20 percent of the offer amount along with the $150 application fee is due upon filing the Form 656.

If the offer will be paid in 5 or fewer installments in 5 months or less, use the realizable value of assets plus the amount that could be collected over 48 months of payments or the time remaining on the statute, whichever is less.

If the offer will be paid in 5 or fewer installments in more than 5 months and within 24 months, use the realizable value of assets plus the amount that could be collected over 60 months of payments, or the time remaining on the statute, whichever is less.

If the offer will be paid in 5 or fewer installments in more than 24 months, use the realizable value of assets plus the amount that could be collected over the time remaining on the statute.

2. Short Term Periodic Payment Offer - Payable in non-refundable installments; the offer amount must be paid within 24 months of the date the IRS received the offer. The first payment and the $150 application fee are due upon filing the Form 656. Regular payments must be made during the offer investigation.

The offer amount must include the realizable value of assets plus the total amount the IRS could collect over 60 months of payments or the remainder of the statutory period for collection, whichever is less.

3. Deferred Periodic Payment Offer - Payable in non-refundable installments; the offer amount must be paid over the remaining statutory period for collecting the tax. The first payment and the $150 application fee are due upon filing the Form 656. Regular payments must be made during the investigation.

The offer amount must include the realizable value of assets plus the total amount the IRS could collect through monthly payments during the remaining life of the statutory period for collection.

The IRS is not bound by either the offer amount or the terms proposed by the taxpayer. The OIC investigator may negotiate a different offer amount and terms, when appropriate. The investigator may determine that the proposed offer amount is too low or the payment terms are too protracted to recommend acceptance. In this situation, the OIC investigator may advise the taxpayer as to what larger amount or different terms would likely be recommended for acceptance.

Payments and Application Fees

When filing an offer in compromise, two separate remittance documents should be sent, one for the application fee and the other for the required offer payment. All payments should be made by check or money order made payable to the United States Treasury. Practitioners who file multiple OICs at the same time should not combine application fees for multiple clients.

The Form 656-PPV, Offer in Compromise Payment Voucher, included in the Form 656, should be completed and attached to any periodic payment(s) that becomes due. Failure to submit any required periodic payments, after the initial payment has been submitted, will result in the offer being declared withdrawn. For offers originally sent to Holtsville, NY, send payments to: P.O. Box 9011, Holtsville, NY 11742. For offers originally sent to Memphis, TN, send payments to: AMC Stop 880, P.O. Box 30834, Memphis, TN 38130-0634.

The OIC application fee reduces the assessed tax or other amounts due. The application fee will be returned if the OIC is deemed not to be processable. Unless the offer in compromise has been submitted under doubt as to liability or a completed Form 656-A and Offer in Compromise Application Fee and Payment Worksheet is included with the Form 656, the $150 application fee must be included with the offer or the IRS will return the offer.

Speak To A Certified Debt Professional

If you are burdened with a minimum of $15,000 of IRS tax debt and are financially stressed, we highly suggest that you speak to a tax debt specialist. Curadebt Inc. can help you to resolve your IRS tax debt. They are ranked #1 by numerous organizations. They can help stop wage garnishments and bank levies. Save up to 75% on your tax debts. Get a tax analysis right now! Click here to request a free Tax Debt Consultation with CuraDebt.

If you are also burdened with credit card debt, there are debt relief agencies set up specifically to handle this type of debt, but not tax debt. To get help with credit card debt, call 1800DEBT.COM (that's 1800-332-8266) for a FREE debt consultation. By calling this number you will not only be able to speak immediately to a "certified" debt specialist, but based on the area code you're calling from, your call will automatically be routed to a debt professional in your local area. Today, each state has their own laws, regulations and licensing requirements, so it's important to speak with someone who is familiar with your particular area.

A professional debt consultant will be able to assist you in various ways depending on your particular situation. So if you have tax debt click here for a tax debt consultation, and if you are over-burdened with credit card debt, call 1800DEBT.COM (that's 1800-332-8266 or click here for a credit card debt consultation.

Act right now and do yourself and your loved ones a huge favor that could significantly change your lives. The consultation is absolutely free of charge, completely confidential and there is no obligation whatsoever. Just do it! You truly have nothing to lose, except that is — your debt!

Free Debt Consultation — Deal Debt A Fatal Blow Today!

Call Now! 1800DEBT.COM (that's 1800 332-8266) or Click Here For Other Options!



Be Sure To Check Out These Other Valuable Financial Resources

Debt Relief   Debt Settlement   Debt Management   Credit Counseling   Debt Consolidation Loan
Christian Debt Counseling   Tax Debt  Student Debt   Business Debt   Stop Foreclosure
Loan Modification   Bankruptcy Alternatives   Filing For Bankruptcy

Credit & Financing   Mortgages   Credit Cards   Auto Loans   Student Loans   Cash Advances
Business Loans   Sub Prime Loans   Income Opportunities   Financial Resources   Payless Insurance

Tax Attorneys and Tax Debt Relief
Debt Settlement Service

IRS Offer In Compromise
Home Page
Custom Search
Main Site     Advertise With Us     Resources

Brought To You By: The Center For Debt Management

The Oldest & Most Comprehensive Debt Management Site on The Net!