We’ve all seen and heard the commercials featuring a taxpayer who hired XYZ Tax Debt company, and they ended up paying only $500.00 on a $50,000 past due income tax debt. Can this really be done??? Will the IRS or state really settle on a past-due tax debt? The answer is “Yes!” BUT, as with everything with the tax agencies, that answer comes with a big asterisk attached. Here are a few excerpts from Chapter 13 of my book addressing the Offer in Compromise/Settlement programs...

• “Is the OIC notion a hoax?

  I’ve had a lot of clients, and even other tax professionals, ask this same question of me. No, the Offer in Compromise programs are not a hoax. I have successfully negotiated settlements for hundreds of taxpayers over the years using these programs. They are definitely not easy to secure, but I find that I am successful with them because I know when it is appropriate to use this resolution option for a client and, more importantly, when not to.”

• “How to qualify for a Doubt as to Collectibility IRS OIC

  You will not qualify for the OIC program if you have other means of paying your taxes or have the capability to address the taxes owed through an Installment Agreement. However, it may become a legal option if you don’t have the assets to pay the bill or if it would create severe financial hardship for your family. The IRS Offer Specialist will negotiate with you or your tax debt resolution specialist what severe hardship means. Your goal is to try to get your settlement as low as possible, but know the tax agencies have little tolerance for renting a cabin on the lake over the summer or a new Range Rover. So, if you think an OIC is an ideal solution to your tax problem, start making strategic financial decisions now. You may need to dial back your lifestyle for the next few years, but saving 60-90% on your tax bill will be worth it.”

• “What if they reject my offer?

  If the IRS rejects the initial offer proposal, that’s not the final answer! As mentioned previously, this is a negotiation, and we have appeal rights. Depending on why the Offer Examiner decided to reject the OIC, we may exercise those rights and ask for the OIC to be submitted to a different division, the Appeals Unit, for further consideration. If the Offer Examiner’s reason for rejecting the OIC is sound and it’s found that appealing the decision won’t get us anywhere, we’ll turn to other alternatives to address the debt.”

• Summary of the OIC program

  An Offer In Compromise lets the taxpayer settle the entire debt by paying an amount that is less than what is owed. To be considered, you must meet certain IRS criteria, but any experienced tax debt professional can figure that out for you. Once approved, you must file on time and make all your future tax payments. If you mess up over the next five years, the OIC will be rescinded, and you will go back to square one.

The IRS normally does not accept offers from applicants with the financial wherewithal to settle their tax burden in full through an installment agreement or by selling assets.

Advantages

• You end up paying back only a portion of the total tax debt owed.
• An OIC allows any tax liens filed against the taxpayer to be removed faster than other resolution options.
• As the debt goes away, you realize more money by not having to pay back taxes or think about an IRS collection agent hounding you.

Disadvantages

• Unless you qualify for the Low-Income Certification, you must pay a filing fee to process the request. It’s a relatively minor amount, but it needs to be paid.
• You do have to make payments towards the debt, with the final terms being unknown until the negotiations are concluded and a settlement number is determined.
• You have to disclose all aspects of your finances.
• There is a possibility of the IRS rejecting the request.
• You must be perfectly tax-compliant for five years following the OIC’s acceptance.”

To learn more about the Offer in Compromise/Settlement programs, pick up a copy of my book, “Tax Debt Rule #1: There’s ALWAYS a Solution” here, or call our office and schedule a time to speak with us. With over 24 years of experience negotiating Offer in Compromise/Settlement petitions for our clients, we love talking about the ins and outs of the programs!

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Trust. Protection. Wisdom.

Your future and your family deserve the right protection. Golden Lion Tax Solutions will be your advisor and confidant throughout the entire journey. We guarantee to offer you or your business best-case solutions for your tax debt. We are by your side every step of the way. Start now and get your life back.

For help with your tax debts, email contactus@goldenliontaxsolutions.com or call 833-LION-TAX (833-546-6829)

Disclaimer: There are requirements that must be satisfied in order to qualify for some of the tax solutions we discuss on our website. Not all of our services will be suitable for every client. Golden Lion Tax Solutions is here to help you find the most appropriate solution to fit your situation.