Taxation & Estate Planning

What is an IRS Problem Solver?

By Darrin Mish

When you think of the IRS, what thoughts come to your mind? Money grabber? Iron-fisted revenue collector? Legalized robber? I?m not surprised. But of late, the IRS has taken lots of steps to change its unenviable image. If you are currently trying to scale a mountain of debt, today?s IRS is more than willing to cut you a deal, but you must meet them half-way. The first step is to treat mailings and phone calls from the IRS with respect, even if you feel that you are being wronged. If you treat all contacts from the IRS with courtesy, you will be accorded with equal respect. The next thing to do is to get the right paperwork done.

If you are facing genuine financial problems like a death of a loved one, loss of job, serious illness etc, you need to act as an IRS problem solver. One way to solve the problem of tax debt is by making an Offer in Compromise application to the IRS. The IRS will determine what is reasonable for you to pay and then based on that number, you can offer to pay a portion of your total tax debt, with the rest being forgiven. As tempting as it may be to try to low-ball the IRS here, they won?t accept any offer that is less than what they think you can pay. This is one way to become an IRS problem solver.

One other situation where you can get an Offer in Compromise is where the amount of tax you owe is disputable. This may arise because the tax may not entirely be yours to bear or due to a wrong calculation. This aspect is seldom explored and that is why you should consult an attorney who can explain this to you more in detail. Regardless of how the mistake was made or where the uncertainty came from, if you can cast a degree of doubt about your current debt, the IRS might be more than willing to cut you a deal and allow you to pay less than what you actually owe.

Here?s another way to be an IRS problem solver.

If you can show that it is practically impossible to pay your tax amount within the time stipulated by the IRS, then you may be successful in getting an Offer in Compromise. In most cases, the IRS will not make outrageous demands on what you are supposed to pay over the next year, but occasionally they do make mistakes. But if you can show that after deducting living expenses, you are in no way able to pay your taxes in full then you have reasonable claim to an Offer in Compromise.

Being an IRS problem solver in these ways entails learning the rules that govern Offers in Compromise and sticking to them.

What is an IRS Problem Solver? is a post from: IRS Tax Problem Solver Blog - IRS Help

Full post as published by IRS Problem Solver Blog on January 26, 2010 (boomark / email).