"Settle for Pennies on the Dollar"

Posted by Andy
We've all seen the commercials, and with the hard economic times I'm hearing from more and more people wondering if these deals are legitimate. Well here is an insightful article that brings some reality to the situation, even if it isn't what most people want to hear. If you want to settle for less than your are owed, consider this advice they give:

The two fundamental rules IRS operates by for offers in compromise are:

a) If you have enough assets to pay the taxes, your offer will not get approved.

b) If you earn enough money to pay your tax debt over 5-10 years, your offer will be rejected.

Let's be honest, the IRS has the power to collect, so why would they settle for less if they didn't have to? For most people the best bet is an installment agreement. You end up paying the whole amount, but over time. The IRS stops harassing you because you are back in compliance. This doesn't mean everyone will qualify for an OIC, but the truth is that few do.

Another word of advice, don't ignore the tax notices. The sooner you reply the more the IRS is willing to talk and be reasonable.

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The content on this blog (www.acollinscpa.blogspot.com) is my personal opinion based on my study and understanding of tax laws, policies and regulations. It’s provided for your private, noncommercial, educational and informational purposes only. It’s not a recommendation or endorsement of any company or product. It should not be relied upon as specific tax advice for your personal situation. I strongly suggest that when it comes to filing your taxes, you get additional, professional guidance from individuals who are familiar with your specific circumstances. Those who choose to rely solely upon the information on this site do so at their own risk and peril, and cannot hold the author liable in any form or fashion.

IRS CIRCULAR 230 DISCLOSURE REQUIREMENT: IRS Circular 230 requires us to notify you that any tax advice contained in this communication is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding tax penalties that may be imposed by law.