‘Tis The Season - The Time for IRS Tax Debt Settlements is Now, Advises Former IRS Settlement Agent

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There has never been a better time for taxpayers to negotiate an IRS tax debt settlement according to Michael Sullivan, a former IRS Settlement Agent, now with Fresh Start Tax. “The IRS is taking action to help struggling taxpayers with tax debt by hiring additional agents specifically to help taxpayers with Offers in Compromise. They have also enhanced the Fresh Start Program to provide “more flexible” Offer-in Compromise terms and conditions.“

Offer in Compromise Form

Offer in Compromise Form

"By becoming more “user friendly”, the IRS will collect additional revenue that was previously uncollectable and people with unfiled tax returns are now coming forward and becoming more tax compliant," says Sullivan.

The IRS has realized that many taxpayers are facing financial hardship in today’s struggling economy and are taking steps to assist those people. The Offer in Compromise program, IRS code 26 U.S.C. § 7122, allows taxpayers to settle tax debt for less than the full amount they may owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship. This also promotes voluntary compliance with all future payment and filing requirements. "Last year the IRS received over 59,000 OIC or Tax Debt Settlement Applications and over 20,000 were accepted, which is the largest acceptance rate ever," says Michael Sullivan, a tax resolution professional of Fresh Start Tax. In the past, the IRS was not inclined to accept offers, as they require many hours to process. The average offer requires 20 -30 IRS hours to process – similar to an actual tax audit.

They are now providing greater access to installment agreements and easing regulations on lien filings. They are also offering a “Streamlined” Offer in Compromise. The streamlined version has fewer financial information requests, greater flexibility when considering payments, and decreased time frame to complete the payment process. To qualify for an OIC, the IRS will assess your ability to pay, income, expenses and asset equity.

Any taxpayer contemplating an OIC should seek assistance with an experienced, professional tax firm.

If a taxpayer's Offer in Compromise is accepted, the IRS has three payment options to choose from:
    Lump Sum Cash Offer – Payable in non-refundable installments, the offer amount must be paid in five or fewer monthly installments upon written notice of acceptance.
    Short Term Periodic Payment Offer – Payable in non-refundable installments. The offer amount must be paid within 24 months of the date the IRS received the offer. Regular payments must be made during the offer investigation.
    Deferred Periodic Payment Offer – Payable in non-refundable installments. The offer amount must be paid over the remaining statutory period for collecting the tax. Regular payments must be made during the investigation.

"By becoming more “user friendly”, the IRS will collect additional revenue that was previously uncollectable and people with unfiled tax returns are now coming forward and becoming more tax compliant," says Sullivan.

If an OIC is rejected after appeal, the IRS knows everything about that taxpayer and may find other avenues to collect the tax. Also, according to IRC 7122, all accepted OIC are open to public inspection for one year.

Fresh Start Tax is a professional tax resolution firm, A+ Rated and accredited by the Better Business Bureau. On staff are Board Certified Tax Attorneys, CPAs, and Former IRS Agents, Managers and Instructors. We have over 206 years of professional tax experience and over 60 years of direct IRS experience. To learn more about Fresh Start Tax, LLC, please visit http://freshstarttax.com or call us at (866)700-1040.

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Kelly Hadlock
Fresh Start Tax, LLC
954-492-0088
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Offer in Compromise Form