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Articles Posted in Offer In Compromise – OIC

IRS has provided updated instructions to taxpayers with respect to the effects of coronavirus – COVID-19 on offers in compromise (OICs).

IRS has the authority to compromise a taxpayer’s tax liability. An OIC is an agreement between the taxpayer and IRS that compromises a taxpayer’s tax debt for less than the full amount owed. IRS will accept an OIC when it is unlikely that the tax liability can be collected in full and the amount offered by the taxpayer reasonably reflects the taxpayer’s collection potential. The goal of an OIC is to collect what is potentially collectible at the earliest possible time and at the least cost to the government.

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The Tax Court has upheld the IRS’s decision to reject a taxpayer’s proposed offer-in-compromise and to decline to abate interest and failure-to-pay additions to tax.

The IRS may enter into an offer-in-compromise to reduce a taxpayer’s outstanding tax liability if, among other reasons, there is doubt as to collectability.

Rejection of offer in compromise OIC denial-

The IRS may compromise a tax debt on the basis of doubt as to collectibility where the taxpayer’s assets and income make it unlikely that the IRS will be able to collect the entire balance. (Reg. §301.7122-1(c)(2)) IRS can look at the taxpayer’s expenses, such as school costs. But the Internal Revenue Manual instructs settlement officers (SOs) that private school tuition is an allowable expense only if required for a physically or mentally challenged child and no public education providing similar services is available.

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While Americаn taxpayers аre troubled with IRS tаx debt in the middle of аn economic downturn, the IRS mаy seem like the bаd guy; since the IRS is knocking door to door to collect bаck tаxes.  The IRS isn’t in the wrong to аsk taxpayers to pаy their bаck tаxes.  So there аre two viewpoints.  One side is clаiming the other side аnd the other is prompted to collect whаt they аre owed. Unpaid back taxes versus offer in compromise resolution is a dilemma.

Get a brief case evaluation by calling us at 877-788-2937.

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Nothing on this earth is scarier than owing money to the Federal Government. This is because of the fact that the IRS will stop at nothing to collect the taxes that are owed. They are the largest and most powerful collection agency in the United States with the full power of the Federal Government behind them. It is not a good idea to fail to file your tax returns, owe unpaid back taxes, this could result in you having to settle your Tax Debt using an IRS Offer in Compromise.

How to qualify for an Offer in Compromise

Not everyone will actually qualify to receive an OIC (Offer in Compromise) from the IRS and just because you filled out the form does not automatically qualify you for Settling a Tax Debt using an IRS Offer in Compromise. There are four preconditions that you must complete before you proceed on to The following are the four steps you must complete in order to move forward

#1 You must be current on filling all past tax returns that you are required to file by law

#2 You have to have had received at least one tax bill from the IRS previously

#3 You must be current on any estimated tax bill payments

#4 If you are business you must be current on all quarterly tax payments

When it comes to Settling a Tax Debt using an IRS Offer in Compromise, the IRS is only willing to make this kind of deal if they are reasonably certain that they are going to collect the most of the tax debt that is owed.

Whether you are an individual with a tax debt problem or a business, you cannot avoid paying your taxes. As a US taxpayer, your income is reported to the IRS by your employer and as a business owner, you are required to submit income reports at regular intervals. So, when tax time comes around the IRS simply waits for you to submit your tax return and they do their calculations and you either get money back or you will be expected to pay the difference at the time you file your return.

Get a free case evaluation today at 877-788-2937.

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The first thing you need if you are facing IRS-FTB-EDD-CDTFA-BOE Tax Audit, or owe back taxes and need a settlement option, is to seek a tax representation firm [tax resolution firm] that specializes in resolving tax problems and controversy matters. Then you can inquire about the fees and cost of service.

Only an EA enrolled agent, tax attorney / lawyer, or CPA certified public accountant can represent you as a power of attorney.

BEWARE of the sales organization companies that heavily advertises on TV, Radio and Internet. Don’t fall for scams! Read our popular beware report HERE.

Not all tax or law firms specialize in audits, appeals, back tax settlement relief, resolution and representation.

Hire and retain the right firm from the first time, understand the fee, cost structure, if hourly or flat fee.

Our tax resolution firm is a tax representation firm, we represent taxpayers before ALL administrative levels of the IRS-FTB-EDD-CDTFA-BOE.

Get a free case evaluation today, or a second opinion, call us at 877-788-2937.

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Offer in compromise to settle your backlogged taxes – get an EA, CPA for Back Taxes

Nothing can be more stressful and alarming than to face the dark side of the IRS. It can be a case were you owe back taxes following an audit, or taxes due in the current year or the previous years, or employment 941 payroll back taxes. A CPA, EA or tax attorney can be of much help with delinquent taxes and secure a tax settlement (IA, PPIA, OIC, CNC).

IRS offer in compromise fresh start tips for:

Unfiled tax returns, unpaid back taxes, 941 payroll issues, wage garnishment release, bank levy release, tax lien release or withdrawal, RO revenue officer help, IRS audits, IRS appeals, audit reconsideration if you have not addressed your audit initially, penalty abatement and various tax resolution options.

Get a free evaluation of your case at 877-788-2937.

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IRS has announced that beginning this month, it will start to send letters to notify “a relatively small group of individuals” with overdue federal tax that their accounts have been assigned to one of four private collection agencies (PCAs). The assignments were authorized by legislation enacted in 2014.

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Dealing with tax debt is stressful, especially because of the aggressive methods IRS tends to employ for collecting the taxes owed to the government.

These range from assessing multiple penalties on late payments, levying your bank accounts, garnishing your wages and sending an IRS Revenue Officer to padlock your business, to forcing your employer to sign into wage garnishments and deducting a sizable percentage of your pay the IRS.

If you can not pay your back tax debt, you should consider an OIC offer in compromise settlement, the IRS has an OIC calculator to help you see if you qualify.

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IRS Small Business/Self-Employed Division memorandum, Calculation of Reasonable Collection Potential in Certain Offers in Compromise Cases (Apr. 28, 2016)

IRS’s Small Business/Self-Employed Division (SB/SE) has instructed its Collection employees not to reject offers in compromise (OICs) by persons in the Cannabis / marijuana business, in states where marijuana sales are legal, merely on public policy grounds.

Offer in Compromise— OICs. Code Sec. 7122(a) authorizes IRS to compromise a taxpayer’s income tax liability. Code Sec. 7122(d)(1) gives IRS wide discretion to accept compromise offers and to prescribe guidelines “to determine whether an offer-in-compromise is adequate and should be accepted.” IRS will consider an OIC where: (1) the taxpayer is unable to pay the tax; (2) there is doubt as to the taxpayer’s liability for the tax; or (3) a compromise would promote effective tax administration because collection of the full amount of tax would cause economic hardship for the taxpayer, or compelling public policy or equity considerations provide a sufficient basis for compromising the liability. (Reg. § 301.7122-1(b)) There is doubt as to collectibility “in any case where the taxpayer’s assets and income are less than the full amount of the liability.” (Reg. § 301.7122-1(b)(2))

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Owe unpaid back taxes, penalties and interest? Wondering what type of help is available?

If you cannot pay your entire tax debt, then a negotiated tax settlement, OIC – offer in compromise would be a great option for you. This allows you to resolve your tax matter and pay less than the entire amount owed. OIC gives you a fresh start, it’s a viable alternative when you are unable to pay your complete tax liability because of your financial hardship.

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