About a year ago we questioned the sincerity of the IRS’s Offer in Compromise program in a post titled Is IRS Offer in Compromise Program a Sham?Â
We said then that it was our experience and the experience of other tax professionals that the program as currently operated was someone of a bait and switch: The IRS entices taxpayers to come [...]
Tags: Announcements · Offers in Compromise
Tax lawyer Mitchell Port of California Tax Attorney Blog notes that Congress is considering passing a bill that will eliminate the 20% downpayment requirement for IRS settlement offers:
To submit an Offer In Compromise (OIC) with the Internal Revenue Service in order to pay pennies on the dollar, a nonrefundable 20% downpayment is required. Combined with [...]
Tags: Legislative Watch · Offers in Compromise
Thomas B. and Labelle B. Lance v Commissioner of Internal Revenue- In this case the taxpayers requested an offer in compromise on the basis of doubt as to collectibility or, in the alternative, an installment payment arrangement, but refused to provide to the IRS officer a completed collection information statement.
The IRS officer did not give the taxpayers [...]
Tags: Court Cases · IRS Installment Agreements · Offers in Compromise
The National Law Journal has a great article titled Attorneys Angered Over Lack of IRS Aid which tells about the IRS’s failure to efficiently and properly evaluate and process Offers in Compromise and Partial Payment Installment Plans:
At the start of the new year, the Internal Revenue Service announced steps to help struggling taxpayers buffeted by the [...]
Tags: IRS Installment Agreements · Offers in Compromise · Taxpayer Advocate
If you can’t pay your tax debt in full, you will have to completely disclose your financial circumstances to the IRS.
There is no way to avoid this disclosure requirement other than making full payment.
A taxpayer’s financial information is provided on one or more of the following prescribed IRS forms:
IRS Form Number
Description
Who Must File
433A
Collection Information Statement [...]
Tags: IRS Installment Agreements · Offers in Compromise · Tax Collections
Nina Olson, the National Taxpayer Advocate, has released her Annual Report to Congress (PDF).
In it she recommends something old and something new: Simplification of the tax code and enactment of measures that will minimize the burden on taxpayers who are struggling to pay their tax bills.
Ms. Olson said, “it is imperative for the IRS to consider the circumstances of taxpayers facing [...]
Tags: Announcements · Back Taxes · IRS Installment Agreements · IRS Liens and Levies · Offers in Compromise · Tax Collections
David W. Trout v. Commissioner of Internal Revenue - In 1997, the taxpayer entered into an offer-in-compromise (OIC) with the IRS covering tax years 1989, 1990, 1991, and 1993. The OIC included a term that required the taxpayer to timely file and pay his taxes for the next five years.
The taxpayer filed his 1996 tax return late [...]
Tags: Back Taxes · Court Cases · Offers in Compromise
In IR-2008-135, issued on Dec. 1, 2008, the IRS announced its institution of a 2 year test of the post-Appeals mediation and arbitration procedures for Offers in Compromise (OIC) and Trust Fund Recovery Penalties (TFRP).
Beginning Dec. 1, 2008, for a two-year test period, IRS Appeals will offer post-Appeals mediation and arbitration for OIC and TFRP cases [...]
Tags: Announcements · Offers in Compromise · Payroll Taxes · Trust Fund Recovery Penalty
Leslie B. Bennett v. Commissioner of Internal Revenue – This case demonstrates how difficult it can be to get the IRS to accept an Offer in Compromise.
The Petitioner, Ms. Bennett, owed $110,000.00 to the IRS. She filed an Offer in Compromise offering $15,000.00 in complete and total settlement of the debt.
The IRS rejected the offer even [...]
Tags: Court Cases · Offers in Compromise
Whatever you think of the IRS, it’s website is a veritable treasure trove of useful information for taxpayers and the tax professionals who represent them.
Here is a table I found that compares the requirements and benefits of the IRS’s various payment and offer arrangements.Â
PAYMENT AGREEMENT COMPARISON TABLE
Type of Payment Agreement
Total Liability Limit?
Timeframe for Payment
Eligibility Requirements
Provide Financial [...]
Wall Street Journal – Taxes Blog
