Settlement of tax debt with an offer in compromise Settlement of tax debt with an offer in compromise | Genesis Tax Consultants, LLC
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SETTLEMENT OF TAX DEBT with an offer in compromise

settlement of tax debt with an offer in compromise 

 

Settle Your Taxes For Less (Often Much Less) Than The IRS Claims You Owe With an Offer in Compromise

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IRS continues to accept more Offer in compromises every year

In May 2012, the IRS again expanded some of the provisions of the Fresh Start program by offering more
flexible terms to its Offer in Compromise (OIC) program that will enable some of the most financially
distressed taxpayers to clear up their tax problems and, in many cases, more quickly than in the past.  

The changes to the offer in compromise affected the calculations of the offer by now taking into consideration only one year of future income versus the previous five years. 

The IRS was already accepting more offer in compromises each year but after the Fresh Start program the acceptance rates began to skyrocket.  In 2016 taxpayers submitted 63,000 offer in compromises in an effort to settle back tax liabilities for less than the full amount owed.  The IRS accepted 27,000 of those offers, amounting to an acceptance rate of nearly 43% of all offer in compromises submitted. (2017 figures have yet to be released at the time of this posting).

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In the past the IRS strictly applied its rules with respect to taxpayers’ budgets and valuation of assets. As a result, most taxpayers who sought a compromise received a rejection. Below are the statistics for offer acceptances during the past several years:

The changes focused on the financial analysis used to determine which taxpayers qualify for an OIC. These changes also enable some taxpayers to resolve their tax problems in as little as two years compared to four or five years in the past. The changes announced include:


• Revising the calculation for the taxpayer’s future income;
• Allowing taxpayers to repay their student loans;
• Allowing taxpayers to pay state and local delinquent taxes; and
• Expanding the Allowable Living Expense allowance category and amount.

Contact Nick today to see how an Offer in Compromise may help you. 
 


 

pros and cons of submitting an offer in compromise 

Advantages to making an Offer in Compromise:

  1. It is possible to save a significant (yes, sometimes even pennies on the dollar) amount of money.
  2. The IRS will suspend collection actions, such as bank levies, wage garnishments, and seizure of assets. 
  3. Your credit rating will improve dramatically if the Offer is accepted as the Federal Tax Lien will be removed.

Disadvantages to making an Offer in Compromise: 

  1. Filing an Offer will toll the statute, meaning that while the Offer is still being worked on by the IRS the statute of collections (10 years) will stop, allowing the IRS more time to collect if the Offer is rejected. This tolling of the statute is automatically extended for the entire period the Offer is under consideration, plus any time the case is in Appeals, and an additional 30 days for sugar on top. 
  2. Whether the Offer is accepted or rejected, you lose your right to contest in court the taxes for any years covered by the OIC. 
  3. The IRS may revoke the Offer in the event it determines you did not fully disclose all your assets or income, meaning you wasted any money submitted with the Offer, allowed the statute to toll, and your right to contest the taxes in tax court.

 

Contact Nick today to see how an Offer in Compromise may help you. 

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What an accepted offer in compromise looks like

 

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Nicholas Hartney, LLC BBB Business Review


 Click on image to verify professional license in the IRS Preparer Directory  Search: Country: Germany | Zip: 65812 | Last Name: Hartney

Click on image to verify professional license in the IRS Preparer Directory

Search: Country: Germany | Zip: 65812 | Last Name: Hartney





➤ locations served

Available for all taxpayers in every state and all Expatriates living abroad. 

☎ CONTACT NICHOLAS HARTNEY, EA

nick@genesistaxconsultants.com
and tell me about your situation. 
 

Areas of Practice


expat tax preparation 

Foreign earned income and housing exclusions for both federal and state income tax returns. Foreign bank account reporting (FBARs), Statement of Specified Foreign Financial Assets, Tax Treaties, Application for IRS Individual Taxpayer Identification Number,etc.


business tax debt representation 

We will file a power of attorney with the IRS and State Taxing Authority to negotiate a hold on all enforcement action such as bank and account receivable levies while we work on an appropriate resolution including Installment Agreements, Company Restructuring, Penalty Abatements, Offer in Compromises, and Currently Not Collectible Status.  We will also advise you if bankruptcy is an option. 


irs and state tax debt representation 

We will file a power of attorney with the IRS and State Taxing Authorities to negotiate an appropriate resolution for back tax debt including Installment Agreements, Penalty Abatements, Offer in Compromises, Innocent Spouse Requests, and Currently Not Collectible Status.  We will also advise you if bankruptcy is a option. 
 


new business entity formation 

We will educate you of the pros and cons of organizing an Limited Liability Company versus a Corporation, S-Corp., Limited Partnership, etc. and assist in the formation of the entity of your choosing.   


previous years tax returns

We will prepare your previous years tax returns to bring you back into compliance with the IRS and State. 


business tax return preparation 

Whether you have a sole proprietorship with a Schedule C or a 1120 Corporate return we will prepare any business return.  

 
 

 
 
The hardest thing in the world to understand is the income tax.
— Albert Einstein, physicist
 
 

 
 
 

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