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Wanna Fix Your IRS Debt? Follow These Tips

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

How To Get Your Offer In Compromise Accepted

According AccountingToday.com. The IRS designed the OIC (Offer In Compromise) for taxpayers who cannot pay their tax liabilities without significant financial hardship.  Not all applicants succeed.  In 2018, the IRS rejected more than 34,000 applicants 24,000 were accepted. This netted $261.3 million for the IRS.  The odds for acceptance is 41 percent, up from 25% ten years ago.

IRS insiders say that applicants need to evaluate several elements to present a successful case to the IRS.

Is An OIC An Option For You?

The IRS will accept you only if:

  • You cannot pay the full tax outstanding, or
  • You do not owe the tax they consider to be outstanding, to the IRS, or
  • Due to unique circumstances, an OIC is in the best interest of the IRS and the taxpayer
  • You are eligible in terms of IRS requirements:
    • You filed your tax returns
    • Received a bill for one or more tax debts included in your offer
    • You stay compliant during the current tax year by paying all estimated tax bills
    • If you are a business owner or employer, that you remain compliant with all required federal tax deposits during the current tax quarter.

The IRS will investigate your:

  • Age
  • Asset Equity
  • Collection Statute Expiration Date
  • Expenses
  • Income
  • Information reported on Form 433-A (OIC)
  • Level of Education
  • Lifestyle

 

 

For example, if an extravagant lifestyle makes it impossible for you to pay your taxes, your application will not succeed.  If your lifestyle is an impediment, an installment agreement is a better option for you. In this event, take note of the Six-Year-Rule combined with the One-Year-Rule (IRM 5.14.1.4.1).

Tips

You need to fill in a legion of tax forms during an application:

  • Form 656: Offer in Compromise
  • Form 433-A (OIC): Collection Information Statement for Wage Earners and Self-Employed Individuals. The IRS uses this to determine the extent of your ‘financial hardship.’
  • Form 433-B (OIC): Collection Information Statement for Business.

Do Not:

During your application, you have to provide facts and Internal Revenue Manual references in support of your case. Do not:

  • Make math errors. Form 433 requires complex calculations. Any mistakes will stop the application until corrected.
  • Leave blank spaces
  • Subtract negative equity: If you owe more on a property than it’s fair market value, you cannot subtract the negative equity. Report it as zero.

 

Download here

 

Appeal If Rejected

Use Form 13711 within 30 days after rejection, to appeal.  If granted, you will get the opportunity to make a better offer to the IRS.

You have to justify your application to appeal based on documentation relevant in terms of the IRM (Internal Revenue Manual), the Internal Revenue Code, and even Case Law.  There is a place for emotional appeal, but this should not be overdone. It should merely be the icing on the cake.

If Appeal Is Rejected

There are several options to consider, each with specific requirements:

  • Installment agreements:

For taxpayers who owe $50,000 or less, this will give them up to 72 months t pay off their tax debt.  If the statute of limitations cut their repayment short, they can waive it.  For taxpayers who owe $50,000 to $100,000, payment plans of up to 84 months are available.

  • Payment Extension:

If all you need is some more time to pay your debt, and your account is not already in the care of IRS Collections, you can apply for an extension of up to 120-days. Otherwise you can apply for a 60-day extension.

  • Currently not collectible status:

The IRS can award you this status if you owe back taxes and cannot afford to pay. The IRS sometimes grant this status to taxpayers the IRS cannot locate or who died without heirs.  This status leads to the end of all collection efforts until further notice.  Only those who suffer significant hardship will qualify.

IRS Debt Resolution

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.

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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.

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

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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.

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