Taxation & Estate Planning

Ads for IRS problems: Be informed, get the facts

By howardlevy

Pennies on the dollar!  Act now before its too late! The laws may change!

During first consultations, my clients often have questions about advertisements they have seen on television or heard on the radio about the IRS offer in compromise process.  Here is my response:

The IRS offer in compromise rejection rate is 75%. The IRS accepted only 11,000 offers last year (out of the 44,000 that were submitted).

An offer in compromise is not for everyone.  Your finances have to match up with the IRS settlement guidelines.  Pennies on the dollar is possible, and is certainly a worthwhile goal.  But a detailed understanding of the what the IRS looks for in a financial statement is key to success.

Some ads also have a call to action – “act now as the laws might change.”

The insinuation that the laws might be changing for the worst is incorrect.  There are no changes in law pending in Congress that would hurt the offer in compromise program or disfavor taxpayers.

The irony is that there is a bill pending in the House Ways and Means Committee – The Tax Compromise Improvement Act - that would help taxpayers by removing the current 20% nonrefundable offer deposit requirement.  This would make entry into the compromise process more affordable.

Bottom line is to be careful.   Ask questions, be informed and get the facts.  As my readers know, as an alternative to the 75% compromise rejection rate, I am a strong advocate of bankruptcy to elminate IRS taxes.

Full post as published by IRS and the Law on November 23, 2009 (boomark / email).