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Category Archives: Offer In Compromise

IRS – Offer In Compromise Changes To Help Struggling Taxpayers

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The IRS has expanded its “Fresh Start” program by providing more flexible terms in its Offer-in-Compromise program. This will allow more financially distressed taxpayers to clear up their tax problems quicker than in the past. The changes announced by the IRS include revising the calculation for the taxpayer’s future income, allowing taxpayers to repay their student loans, allowing taxpayers to pay state and local delinquent taxes, and expanding the allowable living expense allowance category and amount. The IRS has made other revisions including how it determines a taxpayer’s reasonable collection potential and will look at future income from shorter periods in deciding a taxpayer’s ability to pay a tax liability. Lastly, the expanded allowable living expense standards incorporate average expenditures for necessities, and now include additional allowed expenses, such as bank charges and credit card payments.

The Internal Revenue Service just introduced another expansion of its “Fresh Start” initiative by adding more flexible terms to its Offer in Compromise program that will allow some of the most financially challenged taxpayers to clean up their tax debts faster than in the past.

This new program focuses on the financial analysis used to figure out which taxpayers will qualify for the Fresh Start Program. This program allows some taxpayers to clear their tax issues in as little as two years in comparison to four or five years in the past.

In certain instances, the revisions recently announced include:

• Changing the calculation for the taxpayer’s future income.

• Allowing taxpayers to pay back their student loans.

• Letting taxpayers pay state and local delinquent taxes.

• Broadening the Allowable Living Expense allowance category and amount.

Overall, the Fresh Start program is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. It is usually not accepted if the IRS thinks the liability can be paid in full as a lump amount or a through payment agreement. The IRS reviews the taxpayer’s income and assets to make a determination of the taxpayer’s reasonable collection potential.

The IRS understands that many taxpayers are having difficulty paying their bills. As a result, the agency has been working to put in place easier changes to the Fresh Start program to reflect real life scenarios.

When the IRS calculates a taxpayer’s reasonable collection potential; it will look at only one year of future income for offers paid in five or fewer months, down from four years; and two years of future income for offers paid in six to 24 months, down from five years. All of the offers need to be fully paid within 24 months of the date the offer is accepted.

Living Expenses Allowed

The Allowable Living Expense guidelines are used in circumstances requiring financial analysis to decide a taxpayer’s ability to pay. The standard allowances allow consistency and fairness in collection determinations by using average expenditures for basic necessities of people in similar geographic areas. These guidelines are used when looking at an installment agreement and offer in compromise requests.

If you have a back tax balance that you are unable to pay, our tax settlement professionals can help you determine if the Fresh Start Initiative would work for you. For more information about our services, visit us today at www.professionaltaxresolution.com. With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which settlement option will be the best fit for your specific set of circumstances.

For more information about our tax debt resolution services, visit us today at www.professionaltaxresolution.com. Contact us by phone at 888-534-2457 to receive a free, no obligation consultation.

Deceptive TaxMasters Firm Mishandles Clients’ Taxes

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When choosing tax expert for your personal tax preparation needs or a business tax specialist for business tax preparation, it is highly important to choose a proven tax advisor with expertise in tax settlements and favorable reviews from previous clients.

This is what clients of TaxMasters, a recently bankrupted tax preparation company in Houston, Texas, learned after trusting their tax returns to this company, who had broadcast a nationwide commercial promising to settle tax debt for less. The State of Texas is suing Tax Masters because they advertised free consultations with a tax specialist, but calls were actually received by salespeople not qualified to give help with taxes. This would be a violation of the Texas Deceptive Trade Practices Act. TaxMasters may have delayed submitting clients’ taxes until all fees were collected from them. This was resulting in missed tax deadlines, incurring fees and interest owed to the IRS.

This recent blog on ProfessionalTaxResolution.com describes how to choose a tax settlement professional. For your business tax preparation needs, here are tips for selecting a business tax resolution specialist.

It is very important to know you are speaking with a tax professional and not a salesperson when you handle your taxes to avoid costly mistakes and deceptive practices. If you have trouble paying your taxes all at once, options like installment agreements through the IRS can split up the sum into more manageable monthly payments. An offer in compromise can also be reached, where taxpayer’s tax liability is settled for lower than full amount that is owed.

If you are in need of any type of tax settlement services or have tax debt, the qualified tax specialists at Professional Tax resolution can provide you with the help you need.  Because our professionals are familiar with all of the available tax settlement options and are experienced at negotiating tax settlement agreements with the IRS, we can ensure that you will receive the maximum tax advantage for your specific financial situation. For more information about our tax settlement services, visit us today at professionaltaxresolution.com. Contact us by phone at (877)-889-6527 or by email at info@protaxres.com to receive a free, no obligation consultation.

IRS Offer in Compromise – A Review of Eligibility Guidelines

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We get a number of calls inquiring about the IRS Offer in Compromise Program. While an IRS Offer in Compromise is a very effective tax settlement option for a very well defined group of taxpayers, it is definitely not the optimum solution for anyone with an unresolved tax debt. The acceptance criteria for an Offer in Compromise are very specific, the application process is lengthy and the rejection rate can be high. Amazingly the IRS can also take up to two years from the date it receives the initial application to accept or reject an Offer in Compromise. With this timeframe in mind, it is often advantageous to enlist professional help when considering this tax settlement option. An experienced tax settlement professional will be able to determine whether the taxpayer meets the strict IRS qualification criteria and, following that determination, will ensure that the Offer in Compromise application is submitted according to published IRS guidelines. Utilizing a qualified CPA or tax professional can drastically reduce the rejection rate because the preliminary work to qualify you as an applicant and to appropriately complete the forms is done for you.

Not sure if you qualify? The primary components necessary to obtain a successful Offer in Compromise tax settlement are outlined below:

  • The taxpayer must meet one of the three eligibility criteria specified by the IRS. Those three criteria are

1) doubt as to whether the taxpayer is liable for the tax debt

2) doubt as to whether the taxpayer has the means to pay the tax debt

3) a determination that settling the tax debt would promote effective tax resolution.

Since the Offer in Compromise allows a taxpayer to settle a tax debt for less than the full amount owed, the IRS only accepts applications that adhere strictly to theses acceptance criteria.

  • The taxpayer’s eligibility must be adequately documented. Sufficient documentation to support one of the three eligibility criteria is required. This documentation may include tax returns and other financial records, disability claims and records of medical treatment and hospitalization, among other things
  • The total amount of the tax debt must be accurate. This means that the taxpayer must be current in submitting tax returns. All previously submitted returns must be checked for accuracy and refiled when necessary.
  • The Offer in Compromise application must have been submitted according to specific IRS guidelines. All of the necessary forms included with the application must be complete and all required fees and supporting documentation must be included.

Once an Offer in Compromise application is submitted, the IRS will begin its review process. During this time additional information and supporting documentation will be requested when necessary. The review process usually takes anywhere from six to twelve months but can take a maximum of two years. If the application is not officially accepted or rejected within two years, the IRS is required to accept the offer.

If you have an unresolved tax debt, visit us today at www.professionaltaxresolution.com for more information about our customized tax settlement assistance. With over 16 years of experience working with the IRS, our experienced professionals will help you determine which available tax settlement option best meets your specific needs. Contact us by phone at (877) 889-6527 or by email at info@protaxres.com to learn more about our services and to receive a free, no obligation consultation

 

IRS Tax Settlement Help – Tax Debt Tips From a Qualified Tax Professional

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The help of a qualified professional can be an invaluable asset when attempting to resolve a tax debt issue. However, finding the right person for the job can be a difficult task in itself. Many companies that advertise tax settlement help are made up of salespeople and marketing agents who know very little about negotiating with the IRS. Tax law is complex and negotiating with the IRS can be challenging so it is important to find a tax professional who is experienced in providing tax settlement help. To insure that an individual has the knowledge and experience to provide the help you are looking for, it is a good idea to verify their current licensure with the state certification agency and to check their standing with the Better Business Bureau. Hiring a tax professional with verifiable credentials is really the only way that you can be sure of the qualifications of the person you are hiring.

By the time a taxpayer contacts us, they have frequently made numerous unsuccessful attempts to resolve their tax debt by negotiating directly with the IRS. While IRS employees are usually very competent, it is important to remember that it is the job of an IRS agent to collect the taxes you owe. In addition, the IRS is divided into many unconnected departments with very specific functions, so there is a good chance that the agent who happens to receive your call actually does not know how to provide the tax settlement help you are seeking. At Professional Tax Resolution, we work with the IRS on a daily basis. Since we are very familiar with their policies and procedures, we know how to communicate with them effectively and will negotiate with them on your behalf to provide the tax settlement help you need.

If you are a person who has put off seeking tax settlement help, it is important to realize that procrastination can result in some very unpleasant consequences. Tax debt balances continue to accrue penalties and interest until the balance is either paid in full or a tax settlement is reached. This being the case, it is not uncommon for penalties and interest to make up more than half of the total balance that a taxpayer owes. In addition, if a tax debt is ignored long enough, the IRS will initiate some form of enforced collection activity such as a tax lien, a tax levy or a wage garnishment. Any one of these actions usually results in serious damage to the taxpayer’s credit rating. An experienced tax professional will often be able to stop such enforced collection actions and will negotiate on the taxpayer’s behalf to arrive resolve their tax debt using the settlement option that best fits that taxpayer’s specific situation. The available tax settlement alternatives include the waiver of penalties and interest and partial payment settlement options where the IRS accepts an amount that is significantly less than the amount actually owed.
If you are in need of tax settlement help, probably the most important decision you will make is the selection of a qualified tax professional. The CPAs and Enrolled Agents at Professional Tax Resolution have many years of experience providing tax settlement help. We encourage our customers to check our memberships, reviews and affiliations for verification of our credentials and our past successes. For more information about the tax settlement services we can provide, visit us today at www.professionaltaxresolution.com. Contact us by phone at (877) 889-6527 or by email at info@protaxres.com to receive a free, no obligation consultation

An Alternative to an Offer in Compromise – Partial Payment Installment Plan.

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The Partial Payment Installment Agreement allows a taxpayer to settle an outstanding tax liability for less than the full amount owed. Although it achieves much the same end result as the more popular Offer in Compromise, it is less well know and less frequently used.  In spite of certain drawbacks, the Partial Payment Installment Agreement represents another viable tax resolution alternative for those taxpayers who are unable to pay the full balance of their tax debt.

The Partial Payment Installment Agreement was implemented in 2005 to accommodate taxpayers with limited financial resources who had an outstanding federal tax debt. At that time, legislation amended the Federal Internal Revenue Code to allow the IRS to enter into an installment agreement for either full or partial payment of a tax debt. Before this legislation was passed, the IRS only accepted installment agreements for payment of the full balance of an outstanding tax liability.  This meant that the only option for settling a tax debt for less than the full amount owed was the Offer in Compromise. Since the Offer in Compromise has very strict eligibility criteria and is very difficult to obtain, many taxpayers who were unable to pay the full balance of their tax debt were left with no viable tax relief option prior to the passing of these amendments.

As with the Offer in Compromise, any taxpayer submitting an application for a Partial Payment Installment Agreement has to submit a complete and accurate set of financial records for careful review by the IRS. Because a Partial Payment Installment Agreement settles a tax debt for less than the full amount owed, an application is only accepted when the taxpayer in question can document that they are unable to pay the full amount of the debt. In addition, any taxpayer who is granted a Partial Payment Installment Agreement is subject to a complete financial review every two years. If the review indicates that the taxpayer’s financial situation has improved, the installment payments may be increased or the agreement may be terminated altogether.

If you need Tax Settlement Help Call and talk to a CPA today.

We offer free, no obligation consultations. Toll-Free (877) 889-6527

Professional Tax Resolution, Inc. is a tax settlement firm with over 15 years of experience helping clients resolve tax debt issues. Unlike many CPA firms, tax debt resolution is our entire business.  Our services include, but are not limited to, filing back returns, amending returns, setting up Installment Agreements, submitting Offers in Compromise, filing petitions for Innocent Spouse Relief, removing tax liens and levies, stopping wage garnishments and audit representation. No matter what the tax debt issue, our goal is to provide the best tax settlement option available. Our process will always begin at the source of the problem and follow the solution through to a complete resolution.

 Read our Reviews on the Better Business Bureau, Merchant Circle, Yelp, and others.  We will never make false claims or promises we can’t keep.