Monday, August 24, 2015
IRS Settlements - Six Items You Need To Know Before Filing an IRS Offer in Compromise
What You Need To Know
Prior to filing an IRS settlement through the Offer in Compromise program, below are five (5) you should consider.
1. Currently the IRS is approving approximately 42% of all IRS settlements submitted. The clients of Flat Fee Tax Service, Inc. who have submitted an IRS settlement have been successful 90% of the time. So, when you hear "people" claim that the IRS rejects a majority of settlements submitted, it really depends on who submits them. Do it yourself and it's likely the IRS will reject your submission. Have an inexperienced person submit your IRS settlement and it is highly likely you will be rejected.
DO IT RIGHT THE FIRST TIME
2. Taxpayers need to be extremely careful when completing the Collection Information Statement (433-A for individuals) (433-B for businesses).
When filing an IRS settlement, every Offer in Compromise requires the taxpayer to provide a detailed financial information statement. This is your assets, income and expenses. The IRS has specific criteria and it is the responsibility of the taxpayer to know what the criteria is. The taxpayer needs to know what expenses are allowable and what expenses will be rejected. Have an experienced IRS Tax Attorney who does IRS settlements on a routine basis complete your financials before submitting the Offer in Compromise.
3. An IRS settlement should be planned in advance. The IRS is not going to tell you what needs to be done to have a successful Offer in Compromise. An experienced IRS Tax Attorney, who does IRS settlements on a routine, daily basis should be consulted prior to an Offer in Compromise submission. An experienced IRS Tax Attorney will should review your your financial condition. Your assets, current income and allowable expenses are all factored.
4. An IRS Tax Attorney has evaluated the Statute of Limitations on your current tax debt. It may be possible to play a "cat and mouse" game and have the Statute run out on the enforcement of your tax debt. Never, ever try this on your own. The IRS has 10 years from date of assessment to collect each tax year.
5. Understand how much time and work goes into an Offer in Compromise. We always advise our clients that they should expect the IRS settlement process to last 10 to 12 months. It isn't an exciting time. It isn't like watching a basketball game. It's a lot like "watching paint dry." So patience will be a worthwhile virtue.
6. You may be confused over what an IRS settlement should cost you. Like the "wizard of Oz," let's pull back the curtain on the cost of an Offer in Compromise. Whether you owe $10,000 or more, it is the same number of "labor hours" to put together your IRS settlement. That is why, Flat Fee Tax Service, Inc. charges a "flat fee" of $1900 which is spread out over 10 months. We have had so many successful IRS settlements that we know how long it will take and how many "labor hours" we need to do the job right.
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