Use These Four Tips to Maximize the Chance of Getting Your Offer in Compromise Accepted

The IRS Offer in Compromise program is the most popular and approved way to resolve delinquent tax liabilities. Unfortunately, the IRS made the qualification requirements so difficult that only fewer people offer gets accepted or they were made to pay out too much money to the federal government. In this post, we have provided an overview of a few tips that will help put an end to your long-standing IRS tax issue.

OIC Tip #1: Standard or the Actual Expense?
Irrespective of your actual expenses, the IRS have got guidelines on exactly how much you can designate as living expenses. You need to know when the IRS will approve expenses above their maximum limit and when they won’t. While arguing for an expense which is more than the national standards, you have to provide relevant documentation and also have to prove why they are necessary. Know what the IRS considers ordinary and necessary. The outcome can be that you weren't qualified for an offer, or it had no chance of approval simply because you didn’t understand the procedures. Also, you have to determine whether to makes use of the IRS Standards deduction or the actual expense deduction to receive maximum tax benefit.

OIC Tip #2: Reduce Equity Positions
Figure out ways to lower equity in your assets. Don't be tempted to overvalue your assets. Take full advantage of allowed tax deductions and know how to maximize your deductible business expenses. Make use of all possible deductions for vehicle expenses that include fuel, repair and maintenance. While claiming write-offs for automobile operating expenses, weigh up which of the IRS method - standard mileage expense or the actual car expenses gives you a bigger tax deduction. The Internal Revenue Service will view the money in your retirement savings account as an asset and will be valued during the OIC evaluation. Check out the limits of liquidating or borrowing money from retirement account and learn how converting the equity into a future stream of income could benefit you directly.

OIC Tip #3: Use the IRS Statute of Limitations to Your Advantage
Knowing how much time is leftover on statute of limitations (CSED) is extremely important, as this could have a huge influence on the entire process. If the Collection Statute Expiration Date (CSED) is near, rather than gambling on to retrieve the pending taxes, the IRS would really consider accepting your Offer in Compromise.

OIC Tip #4: Don’t Hesitate to Appeal if Your Offer is rejected
Obtain the copies of collection's Income/Expense Table and also the Assets/Equity Table from the IRS in case your offer was rejected. If you find any mistakes or if the Offer examiner did not follow the IRS guidelines exactly, you may appeal for a review of the determination. If you believe the assets value is not correct, dispute them with the latest appraisals. In case the income/expense is not correct, give additional supportive documentation at this stage. If the Offer in compromise isn't accepted, there are other alternative solutions available that you can make use of through appeal.

The Realities of OIC program
The Offer in Compromise program could be your excellent way to address the taxes owed, leading to a fresh start with the Internal Revenue Service. But, the process is very comprehensive and complicated that require great attention to detail, knowledge of numerous IRS rules, procedures and tax laws. Submitting an OIC or handling your own case might end up costing you even more than the original tax debt owed. All these tips are just basic outlines and there are actually a lot of tricks of the trade. Furthermore, Offer in Compromise is not for everyone. Plus there exist negative consequences to filing an offer when there is no realistic chance of its success. By utilizing the services of a trusted tax resolution firm, the tax attorney will stand up to the IRS on your behalf and help you put your tax debt problems behind you right away.

Common Myths Related to the IRS Tax Settlements

With years of experience in resolving various tax problems, it is time for me to explore the common myths surrounding the IRS tax settlement. So if you or someone you know owes taxes to the IRS, just do everyone a favor and read the following top tax settlement myths. 

Bankruptcy isn't an option in settling back IRS taxes

It is true that you can file personal bankruptcy, but there are myriad rules to be followed. Within Chapter 7 bankruptcy, all old 1040 tax returns could be fully discharged even if there are tax liens against your home.  

Tax resolution lawyers can wave a magic wand and cut down my taxes and penalty charges

No, this is not correct. An individual in sound financial standing cannot avoid paying the IRS taxes without good reason, and as a matter of fact, these people should pay the required taxes in full. Also, be careful of those fraudulent firms who claim to lower your penalty charges and interest automatically, as there is no such type of procedure in the IRS. 

IRS tax settlement firms are really fraudsters

There are some people who think that all tax settlement companies are a complete scam. We know that this is not true. Whenever someone comes to us, we provide tax consultation for a fixed flat fee. Someone then tells them that they could get it done cheaper or can choose to do it themselves or by a regular CPA. Then, a year later, they come to us again and say, “I wasted a year and lots of money by not hiring you... Will you help me now?” You have to be very careful not to fall victim to scam companies, and you should only get involved with an established firm where tax consultation is not a hobby. 

The IRS filed a tax lien against the properties which are in my spouse’s name

Tax liens could be filed against any of your properties. Unlike judgment liens, the IRS doesn’t need a court ruling to file a federal tax lien. Therefore, if a tax lien is addressed to your spouse’s property, it doesn’t mean that there is a lien against the property.

The IRS can't do anything if I don't open their letters

It doesn’t matter whether you open the IRS’s letters or not, as they can enforce a collection action after specific time frame. Furthermore, you may lose right to tax court and important appeal rights if you don’t open the letters. 

The IRS must produce a court order to levy my wages or bank accounts

No, they don’t. The IRS will send you 3 letters, and if no action has been taken by you, they’ll just wait thirty more days after the final letter has been sent. After that, they have full rights to levy your wages. 

If I simply get rid of my assets by gifting to my friends and family, the IRS can’t touch me or my property

The IRS will consider this approach as fraudulent, and they are allowed by law to disregard the gift. Second, it will take extra work for the IRS to undo the fraudulent conveyance, and this definitely will anger them further. 

It’s a daunting task for many people to get their IRS tax settlement accepted. That’s why we have created a free comprehensive guide, “7 Steps to Sanity,” which provides full guidance in reaching the best possible settlement. Just enroll now to receive your copy.

           

How it is Easier to Pay-off the IRS Tax Debts When Compared to Other Type of Debts?

It is true that the Internal Revenue Service gives a great deal of suffering to the lives of people who have unsettled tax dues, but when we compare with student loan debt industry, the IRS is far more reasonable with regards to tax settlements. In fact, the number of options you get to solve your tax issues is lot more than what you get in a student loan sector. You'll find three big things that separate the IRS from the more evil student loan industry.

The first big bonus to the IRS is that they have a limited time to collect pending tax dues. They have only ten years to collect the debt and this can be a huge help to someone who is settling debts. There are some constraints, such as if you leave the country, the ten year clock will pause. The IRS can take the debt issues to the court, if they think that you cause problems to them. But in the case of student loans, you've got no other choice rather than to repay them. There is absolutely no escape out of this and even if you file bankruptcy, student loans are not dischargeable.  

The next thing is, based on your income, expenses and your present financial situation, the IRS will prepare a reasonable plan to pay back the debts you owe to them. Even when all hopes are lost, the Offer in Compromise (OIC) program helps you to see some light by the end of the tunnel. This method helps the struggling taxpayers to resolve all payment concerns without adding any unnecessary burden on them. However with student loan debts, the only real option you've is by asking for partial or full deferment on payment of federal loan.

Tax debts are dis-chargeable in Chapter 7 bankruptcy provided you have filed income tax returns for the previous two years. This can be a blessing in disguise considering the fact that you will get full discharge of allowable debts under Chapter 7. To qualify for this, the taxpayer should not been found guilty for any deliberate act of evading the tax laws and also his/her tax return shouldn’t be identified as fraudulent or frivolous. You can put student loan payments in Chapter 13 plan and you will have to pay off in 5 years. But still you've got to repay the complete amount.

The IRS is one of most powerful debt collector in the United States which means they do whatever things possible to get back pending taxes. But when compared with student loan debts, you will get many options like the ones mentioned above to pay off your IRS tax debts. Student loans don't have any statute of limitations and under most circumstances, you need to pay back the loans entirely as there is no way of escaping it. Though the IRS has horrible reputation, you have various solutions to get out of any tax problem.