On February 28, 2017, we posted How To Get The IRS To Accept Your Offer In Compromise? where we discussed:
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Do you owe a substantial amount of taxes to the IRS?
If so, you've likely looked into establishing a payment plan. -
What if you are simply unable to pay your tax balance?
In this case, you might consider requesting an offer in compromise, which is a last-resort option that allows you to settle your account for literally pennies on the dollar. -
A Definition of Reasonable Collection Potential
A reasonable collection potential refers to the maximum amount that the IRS believes it can collect from you over time. Generally, the agency uses a simple formula to calculate this amount, which you can easily figure on your own. -
How to Calculate Your Reasonable Collection Potential
Reasonable collection potential includes two factors: the liquidation value of your assets and your extra monthly income over the next four or five years. -
Downside to Submitting an OIC
Completing the forms is just the beginning. The IRS will ask you for rafts of financial documentation: pay stubs, bank records, vehicle registrations, and myriad other items. This is an exhaustive, time-consuming process. Some taxpayers wind up submitting boxloads of documents to the IRS to support their OIC request.
Now the IRS has just updated its policy covering Offer in Compromise applications: Applications will now be returned without consideration in instances where the taxpayer has not filed all required tax returns.
In such cases, the application fee will be returned and any required initial payment submitted with the Offer will be applied to outstanding tax debt. This update is reflected on the Offer in Compromise page on IRS.gov and the newly updated Offer in Compromise Booklet (Form 656-B) available March 27.
In such cases, the application fee will be returned and any required initial payment submitted with the Offer will be applied to outstanding tax debt. This update is reflected on the Offer in Compromise page on IRS.gov and the newly updated Offer in Compromise Booklet (Form 656-B) available March 27.
Have Tax Problems?
Want to Know if you Qualify for an Offer?
Contact the Tax Lawyers at
Marini & Associates, P.A.
for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).
Read more at: Tax Times blog
