Eight IRS settlement options that could save your skin

I think we’ll have to be honest here. Tax settlement companies have a pretty bad rap. The reason? Perhaps they don’t know exactly what they are doing, perhaps they are ethically challenged, and perhaps they prey on people emotions with fear-based marketing instead of empowering taxpayers with real information.

Well, in this article we will go over Eight IRS settlement options you have to negotiate your IRS tax debt based upon what you can pay and based upon if the IRS assessed your tax correctly.

No matter which tax settlement option you chose, for the IRS to find favorably for you, you must package up your proposal nicely.

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Why borrowing money, from a bank, your retirement, a rich uncle to pay off the IRS may be the worst idea.

Whenever you call the IRS about a past due tax bill, or a Revenue Officer makes “first contact” with you, one of the first things that an IRS employee will do is ask you, is that you pay your past due IRS tax bill in full. Once you tell them that you are  unable to pay your debt in full (and before they ask you if you want to pay it off with an installment agreement) the next thing they will ask you, is “can you borrow money to pay off the your tax bill?“

Well before you go ask for money from a bank, your parents or a rich uncle, first read this article on why borrowing money to pay the IRS off in full, in some circumstances, is the worst possible idea.

Before asking to borrow money for your rich uncle to pay off an IRS lien, read the rest of this article.

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Will the IRS accept my Offer in Compromise?

I get google alerts for the term “IRS Offer in Compromise.” So besides working on Offers in Compromises every day, I read a lot of what is out there on the internet. This is what I have found: Offer in Compromise articles on  the internet fall into four categories.

1. The most common type of Offer in Compromise article is a vague description of the program by a tax resolution firm. Hopefully by reading that article, you’ll be convinced that you should hire the firm.
2. The second type is an article that is so completely wrong it will make your head shake. Just last week, I read an article by a New York tax resolution law firm claiming that the program was a waste of time, and that the IRS won’t even tell you how much you should offer — totally false claims. 
3. The third type is an article by the IRS itself. And it will say something about how the program changed and is supposed to be easier and better to use.
4. And the last type, and most infrequent article you’ll find, is something with actually helpful information about the IRS Offer in Compromise program.

Hopefully this one you’ll falls into category 4.

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How to get an OVDI or FBAR penalty payment plan you can live with

For many US taxpayers considering whether or not to enter in to the IRS Offshore Voluntary Disclosure Initiative/Program (OVDI/OVDP), one of the biggest concerns is — what if I am forced to accept a 27.5% FBAR-equivalent offshore penalty? What if I am stuck with a bill that I can’t afford to pay?

We’ve written extensively about why the 27.5% offshore penalty is unlikely for the majority of OVDI participants, but for the purposes of putting the potentially millions of ex pats, dual citizens and visa holders who need to use some form of the IRS Voluntary Disclosure (standard 2012 rules, streamlined OVDI, or just late FBAR filing) at ease, this article is for you.

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What happens when your IRS Offer in Compromise is accepted

Congratulations! You settled your IRS tax debt. Or did you? Well, not so quick. Before you celebrate, read this article to find out if your Offer in Compromise was actually accepted.

Time to smile? Hold on. Don’t believe the clouds are gone until you see it in writing.

Stanley Harbaugh is one such taxpayer who reached an agreement with an IRS employee to pay $225 a month for 36 months. Yet, after this was done and he paid the IRS this amount in full, the IRS still tried to collect more money from him. Why did this happen? Read on.

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What are IRS allowable expenses?

When you owe back taxes to the IRS, and don’t dispute the bill, and you can’t pay in full, the most critical aspect of your case is — how much can you afford to pay back? In order to determine the amount you can afford to pay, one half of the calculation is your income and assets you have available to pay. The other half is determining what expenses the IRS will allow. A taxpayer who owes money to the IRS will able able to allowed necessary expenses, may be allowed conditional expenses, and may even be allowed miscellaneous expenses.  To illustrate the point, a US tax court case demonstrates that just because something is necessary to a taxpayer, does not mean that that IRS will feel the same way.

In George Thompson v. Commissioner, the taxpayer claimed two expenses should be “allowed expenses.” One was his monthly  tithe (or donation) to his church, the other, his college expenses for his children.  Thus reducing the amount he would ultimately pay back the IRS through a partial payment installment agreement. So on his Form 433a, he included both expenses, and wanted the IRS to reduce his monthly payment by the amount of these expenses. 

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How long does it take for the IRS to accept an Offer in Compromise?

The IRS Offer in Compromise program is a great way to settle unmanageable tax debt. But before you file an Offer in Compromise (for doubt as to collectability), it is a good idea to manage your expectations and realize how long the process is going to take. This article will discuss a typical timeline and some of the usual hitches along the way.

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Do you qualify for an IRS Offer in Compromise?

Who doesn’t want to pay less for IRS back taxes they owe? For most of the people we talk to, they want to know the answer to either “Do I qualify for an Offer in Compromise?,” or others are are suspicious, rating tax debt resolution companies as credible as water-fueled car claims.

A water-powered automobile? If only…imagine the resale value of this lake.

Here’s the thing.

Yes, an Offer in Compromise, if accepted, will lower your tax bill substantially. It is not a scam. Trust me. I have hundreds of accepted Offer in Compromises to prove it. So then, we’re back question “what can you settle my back taxes for with an Offer in Compromise?”

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Can I file an Offer in Compromise when I am unemployed?

Or why settling back taxes is nothing like settling credit card debt

BY: THOMAS S. GROTH, ESQ (find Thomas on twitter! @tsgESQ)

So, you hear an ad on the radio, the voice is telling you that you can settle your credit card debt for less than what you owe.  You think, “I’m unemployed, and I can’t pay, I should be able to get a pretty good deal on my own.”  So you call your credit card company  and you work out a deal!  The bank will settle your debt of $19,566.00 for a one-time payment of $7,500.00!  That’s less than 40% of what you owe.  Well, who would pass up a deal like that?  So you ask family and friends to borrow some money, and you cash out your 401k, and now you have one less thing to worry about once you become gainfully employed again. Success!

Then you start thinking, “I’ve been getting a lot of mail from the IRS, I wonder if I can work something out with them as well.”  You’ve done your research, and you are aware that the debt settlement process with the IRS has a funny name, something called an “offer in compromise.”  And so, now you’re wondering – “Is IRS Debt like credit card debt?  Can I file an Offer in Compromise when  I am unemployed?”

Do you want the quick answer or the complete answer?  The quick answer is yes, nothing actually prevents you from submitting an offer in compromise when you are unemployed.  But should you submit one? Well that’s a bit more complicated. Let me explain.

Solving an IRS tax debt is nothing like settling credit card debt — credit card purchases are voluntary. The IRS is not.

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When should I withdraw my IRS Offer in Compromise?

The IRS Offer in Compromise provides a great chance to settle a tax debt with the IRS permanently. Certainly the are drawbacks to the IRS Offer in Compromise program, but settling your tax debt for a fraction of what you owe is pretty dang sweet. Yet, there are times when you actually don’t want the IRS to fully consider your Offer in Compromise. You can accomplish this by withdrawing your Offer in Compromise. But why would you ever do this? In this article, I will discuss why sometimes withdrawing an Offer in Compromise is the best move…for now.

There’s no bluffing the IRS with an Offer in Compromise. You got to know when to hold them, know when to fold them, know when walk away…

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