IRS Offer in Compromise

We all get behind sometimes. Many folks who, prior to 2008, would never have dreamed of being late, much less behind, are finding themselves struggling just to stave off foreclosure or repossession. It’s tough out there now. It’s as true for your tax situation as it is with your mortgage, car payments, and other debts, too.

People get behind on their taxes for many reasons, many of them legitimate. Heck, just this week actor Steven Baldwin admitted to owing around $400,000 to New York, blaming bad advice from lawyers and accountants. It happens… just ask Wesley Snipes (is he out of jail yet?) He certainly got some bad advice somewhere. Whether you had too little taken out from income, or your business made some mistakes with payroll, or an inheritance or sale of property or some other big event got you all screwed up, many find themselves on the wrong end of an IRS Revenue Agent.

It happens. The question is: what are you going to do about it?

Sometimes the amounts are manageable… $10,000, $25,000, and so forth. But sometimes the amounts are astronomical! Six figures, sometimes even seven figures. But whether the amount is high or low, the result is the same: demand letters and notices from IRS and your state taxing authority demanding payment plus draconian fees, interest, and penalties (as if you hadn’t learned your lesson already). You lose sleep, you argue with your spouse more—you feel further apart, the kids annoy you more, you have less satisfaction with your work. You are dangerously on the edge of serious, medical depression. You don’t know what to do—the past due amount is seriously outpacing your income and your ability to repay and keep current. You feel yourself slowly—maybe rapidly—sliding deeper and deeper into a bottomless pit. You have no idea what to do.

But there’s a few things you can do.

There’s been a lot of buzz lately about the IRS’ new Offer In Compromise program. Maybe you’ve heard of it. It sounds good, right? But… it’s not simple.

Essentially, the Offer-In-Compromise is available to any debtor, not just a tax debtor. Theoretically you could approach any creditor you might have and explain to that person or business that you are broke or unable to pay. Maybe you have a lump-sum of money—less than what you owe, but it’s substantial nonetheless—which you can offer to the creditor to settle your debt. Or maybe you can offer to make a certain number of payments at certain amounts. It’s not ideal, but it’s better than nothing, right?

Essentially you can do the same with the IRS, but it’s not quite as simple. As you might expect, the IRS has set up a pretty complex web of rules about who can make an offer that IRS will consider, how that offer has to be presented and what it contains, how much you have to pay, how long you have to pay, etc. I could go into detail, but honestly, it gets pretty dry. Feel free to head on over to IRS.gov and check it out if you’d like.

Or…you could call me.

I do these all the time for my clients, and I do them well. I know what IRS and Department of Revenue look for, so I know how to present your case to accurately reflect your situation and correctly present you to the taxing authority. This certainly is something you could do on your own, but like I say on the main site, you could also touch a live electrical wire. But why would you?!? Why not let me be the insulation between you and the taxing authority—I know how to best present you, and I know what they are looking for…why waste time trying to muddle through it on your own and potentially make costly mistakes? Most folks find that my fees are minuscule compared to the enormous burden I helped lift off of them, and the IRS is often glad to put the matter to bed as well.

Let’s talk—I can almost certainly help you. There is a solution!

Posted in Deals from the IRS and tagged .