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
Offer in compromise: When do you make too money much to qualify?
An IRS offer in compromise is available to virtually anyone who owes the IRS back taxes. But it is important to avoid confusing the program's widespread availability with success in getting your offer accepted. After all, the last thing you want to do is waste time and money with the IRS on an offer that has no chance. The offer in compromise program does work - but only in the right situation. To have success with an IRS compromise, you have to understand the IRS guidelines for analyzing your offer. Is there a point where you could earn too much money to get a compromise accepted, and ... Read More
IRS partial pay installment agreements: Bringing an end to your tax problem
What if you can afford a monthly installment agreement with the IRS, but your payments will not ever repay what you owe? The good news is that the IRS will give you a payment plan - and leave you alone - even though you cannot pay them back. The IRS calls this partial pay installment agreements (PPIA). Payment agreements that do not pay the IRS in full are permitted not only by IRS internal guidelines (Internal Revenue Manual 5.14.2), but by law (Internal Revenue Code Section 6519). Internal Revenue Code 6159(a) specifically states that the IRS can enter into an agreement that ... Read More
Fresh start with the IRS? Learn how it really works
An offer in compromise can put IRS troubles behind you and bring a fresh start on your taxes. But the road to a fresh start with the IRS is not necessarily as simple as it may sound. The IRS has very strict criteria that they use to determine if a tax debt should be compromised. Before jumping in with a compromise, there is much you need to know about the IRS settlement process, including: - Whether you should even file an offer in compromise. For example, if the IRS has a limited time left to collect your debt (out of the 10 year period they are given by law), should you jump ... Read More
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