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IRS Offer in Compromises

Have you filed a tax return(s) with an amount due, and are unable to pay? Has the IRS audited a tax return, within three years from the due date of the return or the date the return was filed, and now assessed you a large amount due?

In general, the IRS is able to collect your unpaid taxes up to ten years from the date in which the tax was assessed. If the IRS has contacted you concerning your liabilities and the IRS feels that you have not worked with them concerning payment, it is likely that the IRS will move forward with enforced collection. Enforced collection would include the filing of tax liens at the registry of deeds, wage levies, levies upon your social security payments, and/or potentially bank account levies.

If you currently owe the IRS a tax liability there are several different options available to you concerning your dealings with the IRS. Such options include entering into a monthly payment agreement with the IRS, attempting to be placed into currently non-collectible status, or filing an offer in compromise.

The IRS’s offer in compromise program has become widely utilized by taxpayers since its start. The purpose of the program is to provide the IRS with a current “snap shot” of your financial status, and based upon this snap shot make an offer to compromise your outstanding liabilities for an amount below the total liability owed. Such factors that get considered by the IRS include, but are not limited to, bank account balances, retirement account balances, equity in property and vehicles, as well as an analysis of any remaining monthly income after applying certain allowable expenses in accordance with the Internal Revenue Manual.

A compiled offer in compromise packet is sent to the IRS and initially reviewed by an IRS Offer Examiner. The Examiner can choose to accept the offer, provide changes to the figures within the offer, or outright reject the offer. If a solution cannot be achieved with the Offer Examiner, the Taxpayer has the right to appeal the offer to IRS Appeals. An IRS Appeals Officer has a wider range of discretion when reviewing and determining whether to accept an offer in compromise.

If the offer in compromise is accepted, the offer amount must be paid off within a certain time frame. In the majority of cases this period consists of the five months following the offer’s acceptance. The taxpayer must then remain in compliance with the IRS for five years. This compliance requirement includes filing tax returns on time, and not accruing any additional tax liabilities during this five-year period. If a taxpayer with an accepted offer fails to remain in compliance, all liabilities that had been compromised will be reinstated by the IRS.

If you currently owe the IRS tax liabilities, or have been contacted by an IRS official concerning your liabilities, Lake Shore Legal can be of assistance. Our attorneys have vast experience dealing with the IRS and can provide you with insight concerning the best method to move forward. Feel free to contact Lake Shore Legal and allow one of our attorneys to assist you with your tax issue and provide you with information to protect your rights and your assets from potential enforced IRS collections.

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