If you’re squeamish about filing your taxes because you owe back taxes and aren’t in a position to pay in full, you might be able to qualify for an Offer-in-Compromise (OIC). Depending on how much you owe, you could potentially save thousands of dollars in taxes, penalties, and interest by qualifying for an IRS offer-in-compromise settlement.
Tag Archive for OIC
The IRS is taking a close look at the Offer in Compromise program recently.
On March 30, 2016 we posted IRS Revises Offer in Compromise Booklet and Application where we discussed that the 2016 revision to Offer in Compromise Booklet Form 656-B will is available for download. The booklet contains necessary forms and instructions for submitting an Offer in Compromise. Use of earlier versions may result in a delay in the processing of Offer applications.
Now the IRS has released its new policy that effective immediately, the IRS will return newly filed Offer in Compromise (OIC) applications in cases where the taxpayer has not filed all required tax returns (e-News for Tax Professionals 2016-19- May13, 2016). Any fees included with the OIC will also be returned.
A few years ago, a client came to me almost at the point of a nervous breakdown. He had been recently audited by the IRS and subsequently received a tax bill in the mail for over $180,000! After briefly perusing the documents he brought in, I quickly realized that something was significantly amiss with this tax bill. So I advised him not to panic, but to leave his documents with me. After comparing the audit adjustments with his documents, I decided that we had to go and pay the IRS a visit.
A couple weeks later, we were sitting down with the officer who had conducted the audit and his manager, and after reviewing the audit adjustments together, the amount originally assessed was eventually cut in half. The audit officer, who appeared to be a rookie, had apparently done a very poor job. Read more
The most important thing about representing a client is – know at least as much about them as the IRS does.
Don’t ever put yourself in the position of being embarrassed, after putting together your client’s financials or tax audit workpapers – only to learn that the IRS knows about income or assets your client has not disclosed to you.
How do you make sure this never happens?
1) Get a signed power of attorney from the client and/or spouse and/or partner
2) USE the POA to request every possible kind of transcript there is for the year(s) in question – third party reports of income and expenses, master file records, account Read more
I. Concept and Goals
a. Taxpayers who have few assets and little prospect of generating sufficient income to pay a tax liability in full may be allowed to strike a settlement for less than the full amount due to settle their case.
b. The IRS’s acceptance of an offer in compromise conclusively settles the liability, absent fraud or mistake.
c. What is the policy goal? To achieve collection of what is potentially collectible at the earliest possible time and at the least cost to the government while providing taxpayers with a fresh start toward future voluntary compliance. Read more