If you money to the IRS, you have taxpayer rights. Your rights are in the the Internal Revenue Code, which has laws that limit the power of the IRS collection division to collect, levy and destroy. An IRS collection agent cannot always do what he wants, when he wants. These laws protect you from the collection enforcement powers of the IRS. If you are facing an IRS Revenue Officer or an Automated Collection Service representative, IRS collection laws that are on your side can be golden. For when you need it, here are the most important collection laws and rights in the Internal Revenue ... Read More
IRS offer in compromise: Is it really a quick fix to my tax problems?
An offer in compromise is certainly appealing - forgiveness of your tax debt, tax liens released, freedom to use bank accounts and earn wages - all without looking over your shoulder for the IRS. But an offer in compromise is not a quick fix. This is about what they don't tell you on those it-sounds-too-good-to-be true TV and radio ads. Let's illustrate with an example of how the IRS offer in compromise really works. We will start with an OIC submitted at the beginning of a year, and do a month by month walk-through of the path that your offer will likely take: Year 1 of the ... Read More
Does common sense work in negotiating settlements with the IRS?
If you have a tax dispute with the IRS, expect negotiations to be different than what you may be accustomed to. In most negotiations, both sides have something at stake, something to gain and lose. In other words, an element of risk. That dynamic can change when you have to step up to the plate and negotiate with the the IRS. You have a lot at stake. It can be an IRS auditor queuing up a report that your return is wrong and that you owe the IRS money. Or it can be a threat from an IRS Revenue Officer that there will be a seizure of your wages, accounts, or even your house. The IRS ... Read More
IRS compromise failed and now considering bankruptcy? Calculating your discharge date
You have tried and failed at settling your tax debt with the IRS - your offer in compromise was rejected - and are now considering bankruptcy for relief from the taxman. But before you jump in with the bankruptcy filing, it is important to understand how your offer in compromise could have complicated success with your bankruptcy discharge. The bankruptcy code has several rules that must be followed to discharge a tax debt. Most of the timing rules are based on the passage of time, including the time an offer in compromise was pending with the IRS. An offer in compromise can upset ... Read More
How much money will the IRS settle for in an offer in compromise?
The average amount the IRS settles for in an offer in compromise is $6,629. Sounds good, doesn't it? If only it was that easy - everyone would be doing it, right? The reality is that in 2014, the IRS received 68,000 offers in compromise from taxpayers. The IRS accepted 27,000 of those offers. That's an acceptance rate of 40%. Or, if you are a glass half full kind of person, that's a rejection rate of 60%. The total amount accepted in those offers was $179 million. If you are keeping score, that's an average settlement of $6,629. Now, that does not mean that you can ... Read More