Comments on: IRS Settlements Might Become Less Costly http://www.pappasontaxes.com/index.php/2009/06/23/irs-settlements-might-become-less-costly/ Pappas on Taxation Thu, 09 Feb 2012 04:09:25 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Peter http://www.pappasontaxes.com/index.php/2009/06/23/irs-settlements-might-become-less-costly/comment-page-1/#comment-8182 Peter Sun, 05 Dec 2010 12:54:47 +0000 http://blog.pappastax.com/?p=6126#comment-8182 Tony, There is no magical percentage. Every Offer is evaluated on its own basis. In short, the IRS accepts Offers in Compromise for the amount equal to the taxpayer's reasonable collection potential. It is not tied to the amount of the debt, but rather determined by adding the equity you have in your assets to the present value of your expected net monthly income over the next five years. Tony,

There is no magical percentage. Every Offer is evaluated on its own basis.

In short, the IRS accepts Offers in Compromise for the amount equal to the taxpayer’s reasonable collection potential. It is not tied to the amount of the debt, but rather determined by adding the equity you have in your assets to the present value of your expected net monthly income over the next five years.

]]> By: Tony M http://www.pappasontaxes.com/index.php/2009/06/23/irs-settlements-might-become-less-costly/comment-page-1/#comment-8180 Tony M Sun, 05 Dec 2010 06:44:15 +0000 http://blog.pappastax.com/?p=6126#comment-8180 Does anyone have a good feel for what percentage of the debt is acceptable to the IRS in an Offir in Compromise? I have a legitimate debt (non-disputed), but don't have the ability to pay. Does it depend on the size of the debt? Is 25%, as an example, an acceptable offer, or shouldn't I bother to file unless I'm willing to offer a much higher percentage? The 20% is a major deterrent; I would have to borrow that money without any idea if it will be accepted. Obviously, millions are in that boat, hence the proposed bill to eliminate the 20% requirement with the application. Does anyone have a good feel for what percentage of the debt is acceptable to the IRS in an Offir in Compromise? I have a legitimate debt (non-disputed), but don’t have the ability to pay. Does it depend on the size of the debt? Is 25%, as an example, an acceptable offer, or shouldn’t I bother to file unless I’m willing to offer a much higher percentage? The 20% is a major deterrent; I would have to borrow that money without any idea if it will be accepted. Obviously, millions are in that boat, hence the proposed bill to eliminate the 20% requirement with the application.

]]> By: HappyTaxDude http://www.pappasontaxes.com/index.php/2009/06/23/irs-settlements-might-become-less-costly/comment-page-1/#comment-2613 HappyTaxDude Mon, 31 Aug 2009 20:23:02 +0000 http://blog.pappastax.com/?p=6126#comment-2613 Another reason why it would be beneficial to enact this is that a good many offers that were previously submitted were offers funded by a taxpayer's family members who wanted to provide some financial help. However, it's a major disincentive to provide those funds if there is no guarantee that they can be returned if the offer is deemed unacceptable. It has been the proverbial cutting off of the schnoz to spite the face for the government. Another reason why it would be beneficial to enact this is that a good many offers that were previously submitted were offers funded by a taxpayer’s family members who wanted to provide some financial help. However, it’s a major disincentive to provide those funds if there is no guarantee that they can be returned if the offer is deemed unacceptable. It has been the proverbial cutting off of the schnoz to spite the face for the government.

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