Tuesday, June 7, 2011

IRS Process -- Offer in Compromise -- IRS Streamlined Settlements

IRS Streamlined Offer in Compromise Program 


IRS SETTLEMENTS - STREAMLINED




The IRS has "streamlined" the Offer in Compromise (OIC) program is intended to speed up the processing of an IRS settlement (OIC) for qualified and eligible taxpayers. Having started in 2010, the streamlined Offer in Compromise program (OIC) is relatively new. The IRS recently issued instructions to its offer examiners, urging them to process your streamlined Offer in compromise (OIC) as expeditiously as possible. 
OWE THE IRS?
YOU ARE NOT ALONE

One recent survey estimate that one (1) in fifteen (15) taxpayers is now in arrears on tax payments to the IRS to at least some degree.  Because of continuing fallout from the economic downturn, however, the IRS has tried to speed up its Offer in Compromise process to the advantage of both hard pressed taxpayers and its collection numbers.
THE IRS

HAS EASED

ELIGIBILITY

FOR AN

OFFER in COMPROMISE 

I’ve made a whole set of changes to the Offer in Compromise (OIC) program since I’ve been here to try to increase the participation rate, increase the acceptance rate, because it’s good for the tax system,” Doug Shulman, the IRS Commissioner said.

“These changes to the Offer in Compromise program will help give taxpayers a fresh start,” said Doug Shulman, the IRS commissioner, in a conference call with reporters. These changes “are especially appropriate as the American people and small businesses are climbing out of the worst recession in a generation.”

“There are a variety of things, all aimed at increasing acceptance rates for an Offer in Compromise, making it a user-friendly thing to apply for,” Shulman said. 

OFFER in COMPROMISE Program
The Offer in Compromise program IS, on its face, a very attractive program to taxpayers with unpaid liabilities. An IRS settlement through the Offer in Compromise program is an agreement between a taxpayer and the IRS that settles the taxpayer's tax liabilities for less than the full amount owed. 
Keep in mind that taxpayers do not automatically qualify for an Offer in Compromise (OIC). The IRS has cautioned that, absent special circumstances, if you have the ability to fully pay your tax liability in a lump sum or via an installment agreement, an Offer in Compromise (OIC) will not be accepted.

The IRS may accept an offer in compromise based on three grounds:
  • Doubt as to collectibility
  • Doubt as to liability
  • Effective tax administration
See our other Blogs or go to our Website at: http://www.flatfeetaxservice.us for a further explanation of the above terms/grounds.

The decision whether to accept or reject an Offer in Compromise (OIC) is entirely within the discretion of the IRS. 
Sometimes, but very rarely, an Offer in Compromise (OIC) will be deemed accepted because the IRS failed to reject it within 24 months of receiving the offer.

What is a Streamlined Offer in Compromise
The low acceptance rate in the past for the Offer in Compromise program (OIC) has some lawmakers in Congress and taxpayer groups upset. One of the most vocal critics has been the National Taxpayer Advocate, Nina Olson, who has urged the IRS to bring more taxpayers into the Offer in Compromise (OIC) program. 
In response to this criticism, the IRS launched the streamlined OIC in 2010. 
A streamlined IRS settlement through the Offer in Compromise (OIC) program is intended to cut through much of the red tape that has surrounded an Offer in Compromise. The IRS promised, among other things, to process a streamlined Offer in Compromise more quickly.

In February 2011, the IRS announced some changes to streamlined OICs. 
An IRS Streamlined settlement through the Offer in Compromise program may be offered to taxpayers with total household incomes of $100,000 or less and who have a total tax liability of less than $50,000. 
Taxpayers who do not meet these requirements may apply for a traditional Offer in Compromise (OIC).

Streamlined Offer in Compromise Procedures
The new streamlined Offer in Compromise procedures do not necessarily mean that the IRS will accept more OIC's. The IRS will process the offers it receives more quickly. 
YOUR
OFFER in COMPROMISE
WILL STILL NEED TO HANDLED
DILIGENTLY and CORRECTLY 
Since the streamlined Offer in Compromise program is relatively new, the IRS has not yet reported how many streamlined settlements through the new Offer in Compromise program it has accepted.
Before the IRS accepts or rejects a streamlined Offer, IRS examiners must verify that the information provided by the taxpayer is correct. The IRS instructed examiners reviewing streamlined OICs to verify taxpayer information through internal research. Examiners will verify ownership of items such as real estate, motor vehicles and other property.

Offer in Compromise Examiners will, also, be able to communicate directly with taxpayers or their representatives. The IRS instructed their Offer Examiners to contact taxpayers or their representatives by telephone whenever possible; rather than sending written notices. Three phone attempts should be made over two business days to contact the taxpayer or his/her representative. If the examiner reaches the taxpayer's voicemail, the examiners should request a call-back within two business days.

The streamlined Offer in Compromise program is not for everyone. Indeed, the acceptance rate for all OICs (just about 13,000 in fiscal year 2010) means that relatively few taxpayers will make an Offer that the IRS will accept. Most rejections are due to faulty paperwork, missed deadlines and low ball settlement offers.  
HOW TO AVOID REJECTION
  1. Have a Tax Professional, who has had success with the Offer in Compromise program, represent you.
  2. Be sure that all of your Offer in Compromise paperwork is done correctly.
  3. Be sure to dot all of the "i's" and cross all of the "t's" on your Offer paperwork.
  4. Provide every piece of documentation promptly.
  5. Do not miss a deadline.
  6. Make sure that you know exactly what the formula is for arriving at your correct settlement amount. This is not like negotiating a credit card debt. There is no back and forth. There is no haggling. The IRS has a distinct formula and your Offer better be "on the money" to avoid rejection.
  7. The IRS is the world's most powerful collection agency with enormous powers. DO NOT LIE, FAKE, MASSAGE THE NUMBERS.
You Can Get Your Offer in Compromise Accepted

If you are struggling financially and do not have the assets to pay the IRS the entire amount of your tax liability, you should seriously look at an IRS settlement through the Offer in Compromise program.


I am Dave Rosa, the V.P. of Client Relations at Flat Fee Tax Service, Inc. I will conducting your confidential consultation that will determine your qualifications for the Offer in Compromise program. It is my duty to you, as well as Flat Fee Tax Service, Inc., to provide you with an honest and straightforward evaluation of your IRS problem. We do not employ salesmen. We strive to keep our costs as low as possible so that we may pass on these savings to our clients. You will work directly with the Tax Attorney assigned to your case. Our fees are clearly and boldly posted on the 1st page of our Website for all (including our competitors) to view. We only want clients that we can benefit in a positive way.

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1 comment:

  1. If you owe the IRS a tax liability and cannot pay the IRS, you may be eligible and qualified for an IRS streamlined settlement through the new Offer in Compromise program. Find out if you are qualified.

    ReplyDelete