fbpx

How To Request The IRS for Acceptance Of Your Offer To Lower Your Tax Debt

Get a free IRS Debt case review today. Email us at support@fascpaconsultants.com  and include all the letters received from the IRS.

Meet Our Insider

Our insider was a revenue officer at the US Department of the Treasury. “As a point of contact officer for offers in compromise (OIC), I saw many OICs – great ones and bad ones. I know how to draft a winning proposal, which will improve your odds of acceptance by the IRS.

The OIC (Offer In Compromise) Process

According AccountingToday. The OIC was developed for taxpayers who cannot pay their tax debts without significant financial peril. Today, the IRS acceptance rate for OICs is almost 41% – up from 25% ten years ago.  In real terms, they rejected 34,000 offers in 2018. However, they did accept nearly 24,000 offers and in the process, collected $261.3 million in compromises.  Several elements have to be evaluated before you can build a successful proposal.

  1. An OIC proposal is made on Form 656 (Offer in Compromise) and includes Form 433-A (OIC) along with the required supporting documents, to help the IRS to consider all the factors they look at including your:
  2. Income
  3. Expenses
  4. Asset Equity
  5. Lifestyle

If your lifestyle suggests that you can pay your taxes providing you become a bit more austere, the IRS might reject your OIC.  If they do, it is worthwile to pursue the option to come to an agreement with the IRS to pay them in installments.  If you do, please consider the Six-Year Rule in combination with the One-Year Rule (IRM 5.14.1.4.1) carefully.

  1. Age
  2. Education
  3. Collection Statute Expiration Date

This form requires a lot of sophisticated financial calculations and if you make a mistake with any of the numbers, the whole process is stranded. You must do it right even if you have to employ an outside professional to help you.

 

  

Never leave a blank space on any of the forms for any reason whatsoever. The IRS officer will have no idea why you did not fill out the space.  When applicable, write a zero or N/A in these spaces.
If your property is underwater and worth less than you owe on it, YOU CANNOT subtract your negative equity from your ‘net realizable equity, (NRE).  You cannot do it!  You have to report any negative asset as ‘ZERO.’
Your supportive documents should ‘prove’ every aspect of your case and every figure you rely upon.  Use the Internal Revenue Manual for references to back up the foundation of your case. This is vital.

Is The OIC Intended For You?

The IRS will typically accept a proposal that promises to bring in the ostensible maximum amount of money from the taxpayer, in the shortest time frame possible, if there is doubt as to the collectability of the revenue or the liability of the tax, or if it seems to be in the interest of effective tax administration.

What Does This Mean?

It means:

  1. You cannot pay the full amount outstanding
  2. You do not actually owe the total amount outstanding
  3. According to a unique set of circumstances, your offer is in the best interest of all the parties involved.

Are You Eligible?

The eligibility requirements are:

  1. You filed all your tax returns
  2. You received a bill for at least one tax debt included in your proposal
  3. You must pay all the required estimated taxes for this tax year
  4. You must make all your required federal tax deposits for this year (if you are a business owner or employer).

 

Download here

First Refusal

If you receive a rejection notice to inform you that your OIC has been rejected, you can appeal this decision by filing a Form 13711 within thirty days of receiving the notice.  If an appeal is granted, you will get the opportunity to renegotiate your offer under more favorable terms – for the IRS.

To justify an appeal, you have to provide documentation as a reference for the IRM, IRC and court decisions you base your request on.  If you have no references from the IRM and IRC left, use case law to persuade.

The human side of your circumstances, although not unimportant, should not be the main thread of your argument – only the ‘cherry on top.’

OUR INSIDER SAYS
I never lost an appeal hearing when I rooted my arguments in the IRM and the IRC.  Expect your IRS case officer to do the same. Prepare well!

What If Your Request For An Appeal Is Rejected?

If your OIC failed and your request for an appeal rejected, there are other options. These options bring along new requirements and again, depends on your situation.

Installment Agreement

If you cannot pay what you owe right now, this might work. If you owe $50,000 or less, you might be granted 72-months to repay your debt, and you can be expected to waive the statute of limitations on your debt if it cuts short your repayment window.  If you owe between $50,000 and $100,000, a window of 84-months can be granted to pay off what you owe.

IRS Debt Resolution

Payment Extension

If you need more time to pay your debt, you can request a 120-day extension, but if your account is already in the hands of IRS Collections, the maximum extension you can get will be 60-days.

Currently Not Collectible (CNC) Status

You might be awarded CNC status if you owe back taxes which you cannot pay, or if the IRS cannot locate you, or if you die without leaving any heirs.  In the event of CNC status being awarded to you, all collection will cease – UNTIL FURTHER NOTICE.  For this to happen, you will have to prove significant hardship.

Readers should note that this article is only intended to convey general information on these issues and that FAS CPA & Consultants (FAS) in no way intended for the contents of this article to be construed as accounting, business, financial, investment, legal, tax, or other professional advice or services.  This article cannot serve as a substitute for such professional services or advice.  Any decision or action that may affect the reader’s business should not rely solely on the contents of this article, but should rather be consulted on with a qualified professional adviser. FAS shall not be responsible for any loss sustained by any person who relies on this presentation.  This article is subject to change at any time and for any reason.

If you have any questions in relation to your IRS debts, send them to us

Like this article? Join our Tax Facebook Group: IRS Tax Debt Resolution

Testimonials

Thanks to FAS & CPA Consultants and Fulton Abraham Sanchez, CPA, I was able to resolve a debt of $479,677.71 that I had with the IRS.

Gala Cedeño

My experience with FAS CPA & Consultants has been incredible, their professionalism is impeccable. I highly recommend them.

Carlos Lange

I highly recommend FAS CPA & Consultants, they are responsible, efficient and very dedicated.

David Barceló

 

Get a free IRS Debt case review today. Email us at support@fascpaconsultants.com  and include all the letters received from the IRS.

Strategies for Business Growth, Tax Planning and Offshore Banking

Business

Taxes

Offshore Strategies

Request a Confidential Consultation

FAS CPA & Consultants

9000 SW 137 AV Suite 224 Miami, FL 33186 T: 786-462-7899 E: support@fascpaconsultants.com

 

Fulton Abraham Sanchez, CPA

Fulton Abraham Sánchez, CPA I am Certified Public Accountant, specialized in Tax Planning & Offshore Strategies for Real Estate, Hedge/Equity Funds, Fintech, Crypto, Expats, IRS Debt Resolution. You can email me fa@fascpaconsultants.com and follow us on Facebook : FAS CPA & Consultants.

You may also like...

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

error: Content is protected !!