Offers in Compromise
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UPDATE: In May 2012, because of the poor economy the IRS changed its Offer in Compromise rules. Tax Settlements are now much easier to get. Contact The Pappas Group today for a free analysis of your case.
The IRS May Accept Less Than the Full Amount Owed
The IRS will accept less than the full amount you owe if you can prove to it that you can’t pay more than the amount offered and that it is in the government’s best interest to accept the offer rather than continue to expend its resources chasing after you.
In-Depth Financial Analysis Required Before Submission of an Offer
One of the reasons we can boast of a high percentage of accepted IRS settlement offers is because we only take those cases where the chances are strong that the IRS will accept the Offer.
This means we have to do some serious analysis before we recommend the filing of an Offer.
The great majority of IRS Offers are based on what is known as “doubt as to collectibility.”
In order for the IRS to accept a doubt as to collectibility offer, the taxpayer must prove to the IRS’s satisfaction that he cannot pay the debt (including any accrued interest and penalties) in full.
Here are the things that without exception must be analyzed before deciding to file an Offer in Compromise:
- The Value of the Taxpayer’s Assets as Compared to the Amount of the IRS Debt
- The Taxpayer’s Monthly Income as Compared to His Monthly Necessary Living Expenses
- The Taxpayer’s Age and Prospects for Continued Employment
- The Amount of Time the IRS Has Left to Collect the Tax Debt (Statute of Limitations)
It is a Mistake to File an Offer Without Adequate Prior Financial Analysis
There are potentially serious consequences to filing a frivolous or meritless Offer in Compromise, including the imposition of a $25,000 “delay” penalty and the extension of the statute of limitations on collection.
You should never file an Offer in Compromise without having a trained and qualified CPA or Tax Lawyer perform the proper analyses.