Less than 5% of our Practice is devoted to
Offers' in Compromise
Q. Why do so many Offers in
compromise fail?
A. Most Offers fail because
they are not realistic.
Contrary to the commercials
that promise to settle tax debts for pennies on the dollar - the IRS is not in
the business of compromising its debts! Ironically the IRS’s own
guidelines claim they will generally compromise a liability if the liability
exceeds the taxpayer's reasonable collection potential - but in reality, this
is seldom the case.
Understanding the
Process Step (1)
Determining your Reasonable
Collection Potential Essentially,
the IRS considers your past, present and future earnings; how much disposable
income you have, and the liquidation value of your assets, including real and
personal property,
e.g. land, bank accounts,
stocks, investments, automobiles, artwork, jewelry, silverware, future
interests, lawsuits and inheritances.
Understanding the Process
Step (2)
Keeping it Real. To be successful an Offer
must be equal to or greater than the IRS’s Reasonable Collection Potential
amount. Unfortunately, the IRS is not obligated to accept an offer that
meets or exceeds this amount - rather they are only required to “consider” the
offer. Additionally, the IRS will
consider their ability to collect the money you owe, either voluntarily or via enforced
collections.
Installment Agreements that
Actually Work
Rather than face the
indignity of a bank levy or wage garnishment, we may be able to negotiate a
manageable installment agreement between you and the IRS and/or State. When
done properly, an Installment Agreement allows you to remain in compliance with
current tax obligations, cover your ongoing expenses like mortgage payments etc.,
and if possible, simultaneously repay some or all of your past due tax
liabilities.
ACHTUNG! Think long and hard before
you file an Offer in Compromise. Sometimes, the best and
most cost effective option is to simply pay what you owe. That may be a bitter
pill to swallow, but it’ll cure what ails you. Attorney Dorin and David Selig
help people who want to solve their tax problems – and sometimes, the best
solution is to simply pay the Government what you honestly owe.
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