North Charleston, S.C. (PRWEB) January 18, 2008
JK Harris and Company, LLC, CEO and founder John Harris both applauds and agrees with the Offer in Compromise section of the recently released National Taxpayer Advocate 2007 Annual Report to Congress.
National Taxpayer Advocate Nina E. Olson defines one of the problems with the IRS by stating, "The IRS' Offer in Compromise (OIC) program is no longer being used to any significant extent as a viable collection alternative."
Harris, founder of the nation's largest tax resolution company, agrees with the assessment. "It appears pretty obvious the Offer in Compromise program is not being used to its fullest potential," Harris said.
An Offer in Compromise is an agreement between the IRS and taxpayer that allows the taxpayer's delinquent tax debt to be compromised for less than the amount owed. The offered dollar amount is based on the taxpayers net worth plus their future income potential, in other words, what the client is actually able to pay.
One of the reasons Olson attributes the report's findings to is IRS rule changes over recent years that seem to have discouraged taxpayers from attempting to compromise their liability, despite an Offer being a win-win situation for everyone.
"In fiscal year 2007, accepted Offers generated 17 cents for every $1 owed," Olson said. " By contrast, IRS research indicates the IRS has historically collected only 13 cents for every $1 owed on debts that are two years old and virtually nothing on debts that have been outstanding for three years or more."
"When it is used, and used properly, the Offer program is a winner for everyone involved, the taxpayer and the IRS," Harris said.
Also included in the report were recommendations for the IRS and the OIC program, including the following:
- Provide taxpayers with the right to appeal to the IRS Appeals function the IRS' decision to return an OIC before or after accepting it for processing.
- Give taxpayers credit for Tax Increase Prevention and Reconciliation Act (TIPRA) payments associated with prior Offers returned, rejected, or withdrawn within the preceding 24 month period on the basis that the new Offer should really be regarded as part of the same debt resolution process.
- Revise its OIC outreach efforts to taxpayers and practitioners and to better assist them with the submission of "good" or reasonable and appropriate Offers and clearly state that OICs are an acceptable collection alternative.
- Ensure that OIC training is a mandatory topic in fiscal year 2008 for all Collection personnel responsible for taxpayer contact (e.g. Revenue Offers and Automated Collection System employees) to heighten employee awareness of OICs being a "win-win" situation for taxpayers and the government, given the appropriate set of circumstances, and partner with Taxpayer Advocate Service to develop such training.
- Issue guidance that includes several realistic examples of Offer resubmissions that are not deemed solely to delay collection.
"The OIC program really does work, and it gives taxpayers a chance to get their financial lives back on track, and in turn, give them piece of mind," Harris said.
About JK Harris:
JK Harris & Company, LLC, (http://www.jkharris.com) based in North Charleston, S.C., is the nation's largest tax resolution firm and has served over 200,000 customers since its founding in 1997 by John K. Harris. JK Harris consultants are available to meet with consumers in over 425 locations nationwide by appointment only. The company also provides services for student loan debt, fee-based financial planning, small business services, tax return preparation, and audit representation.