Offer in Compromise
IRS
Can you imagine what it must feel like to owe an insurmountable amount to the IRS, and have that debt vanish overnight? It’s a magical thing. Some state tax authorities offer similar programs, but the IRS is one of the only creditors with a formal program to settle a debt for less than what is owed. We’ve settled hundreds of Offers in Compromise with the federal and state tax authorities, and we’re happy to evaluate if you may qualify for a settlement. Please schedule a free 15-minute consultation or call us today.
Questions?
This seems too good to be true—why would the IRS write off thousands, hundreds of thousands, even millions of dollars in tax debt owed by a single household or business?
Believe it or not, the Offer in Compromise program at IRS is real, and we’ve watched the way it changes taxpayer lives overnight. There’s always a certain incredulity exhibited by our clients when they first hear that IRS has wiped out billions in taxpayer debt since the program’s inception. And when we are out in the world and explain our profession, some people are even hostile—that’s not fair, they say, we paid our tax and didn’t get any break—why should these folks? Why does Uncle Sam allow such a program to exist? Well, Congress passed it into law because of a few reasons, but the main one is to write off uncollectible debts. Any good business will write off a debt that will never be paid—it doesn’t make sense to keep spending resources to try and collect when there is nothing to collect. A tax debt can be so punishing that a person’s livelihood becomes that of an indentured servant, and they are living to pay off their tax debt. Congress realized it could make more money by allowing taxpayers a way out from their debt by paying what is their reasonable collection potential, and then clearing the debt. Freed from their debt, taxpayers will go out and make more money than they did before, thereby remitting more taxes to the Feds than if they continued to be hamstrung by the debt. Plus their agents can actually spend time collecting revenue rather than harassing indigent taxpayers. It is absolutely the best program the government offers delinquent taxpayers, so reach out today to see if it is realistic for your family or your business.
No, really—what’s the catch?
We hear you. It’s so good there’s got to be a catch. Well, the catch isn’t a catch for most Americans, but for someone who has had a tax debt, can be a tall order: you have to stay current and complaint with all of your taxes for 5 years. If you are fortunate enough to get an Offer an accepted, part of the contract you enter into stipulates that you will be a good taxpayer moving forward. Should you accrue in the future, the whole debt comes back with penalties and interest. Having done this work for over a decade, inevitably we’ve had occasion to hear from taxpayers that have defaulted on their accepted Offer in Compromise. It can be a bit like sending someone who’s been freed back to the dungeons. The good news is that you can always submit another Offer, and we’ve done that very thing for our wayward taxpayers who defaulted. There’a always another whack at the piñata, so call us if you think you might qualify and are ready to get back into compliance to get your Offer accepted.
What’s the smallest amount you’ve negotiated for an Offer’s acceptance? What’s the most debt you’ve seen wiped out overnight?
The lowest Offer we’ve negotiated was for $5, and we’ve seen over 16 million disappear from a taxpayer’s account with a successful Offer. Of course, you can’t go off these results for your individual case, but it does allow you to see what is possible. Sometimes Offers look a lot different than these extremes; instances where you have a taxpayer that has a significant amount for their Reasonable Collection Potential, but still end up with a good deal (like paying $40,000 instead of their $100,000 tax debt). It all depends on your individual case. Call us today to see if you might qualify and how much IRS would reasonably expect to collect from your debt based on your specific facts and circumstances.