IRS has a program called Offer in Compromise (OIC) which allows eligible Taxpayers to settle a tax debt with IRS for less than the full amount owed. Not all Taxpayers are eligible. The OIC is not available to partnerships, corporations, residents of U.S. territories or foreign countries, or military personnel using an APO or FPO address. Before IRS considers an OIC, the Taxpayer:
- Cannot be in an open bankruptcy proceeding.
- Must have filed all required federal tax returns.
- Must have made all required estimated payments.
- If a Taxpayer is an employer, then the Taxpayer must have made all required federal tax deposits.
If the Taxpayer is not in bankruptcy proceedings, has filed all required tax returns, made all required estimated payments and an employer all required federal tax deposits, then the Taxpayer can proceed with the process. The purpose of the OIC is to provide a new start to eligible taxpayers. IRS will consider what is in the best interest of the Taxpayer and IRS, through assessing the Taxpayers ability to pay.
If the Taxpayer can pay the tax debt in full or through an Installment Agreement, IRS, generally, does not accept OIC. If the Taxpayer agrees with the tax debt, but is not able to afford to pay the tax debt in full, then a doubt as to collectability offer can be presented through the OIC. IRS will only consider the Taxpayer’s true ability to pay and the taxpayer must make an appropriate offer based on his or her actual ability to pay.
When evaluating an OIC, IRS considers an entire household as all those, in addition to the Taxpayer, that contribute money to pay expenses related to the household (rent, utilities, insurance groceries, etc.). Expenses for college, private schools, charitable contributions and other unsecured debt payments are not included in the expense calculation. Because tax transparency is key, information submitted to IRS must be accurate and complete.
Don’t be a victim of your own making. An IOC is a complicated process. Consult your tax specialist when confronted with the possibility of an OIC.
By Stanley Foodman CPA for TYT
Stanley Foodman CPA is CEO of Foodman CPAs & Advisors in Miami, Florida and a recognized forensic accountant and litigation support practitioner. Specializing in complex domestic and international tax matters, he has served as an expert witness and forensic accountant for some of the nation’s most challenging, high-profile economic crime cases. He and his team of accountants also assist clients with a full range of accounting matters including compliance, voluntary disclosure, corporate and individual taxation, family law litigation, estate and trust tax and wealth planning. Consistently ranked as one of the top accounting firms in South Florida, Foodman CPAs & Advisors assists clients locally, nationally and internationally.
- Foodman CPAs and Advisors
- * 1201 Brickell Avenue * Suite 610 * Miami, Florida 33131
- Tel 305 365 1111 * Fax 305 365 2244
more recommended stories
Man threatens a woman with a knife in front of “La Ermita”
According to locals, on Thursday March.
Tourism in Mérida keeps booming prior to Semana Santa
“Yucatan stands out as spearhead in.
Mérida and Athens, Greece about to work together in urban mobility program
Urban Mobility and Citizen Participation in.
Germany returns Mexico two Olmec busts stolen in the 80s
After at least 10 years of.
Oxkintok, stone of three suns
“Whoever lives sees, but whoever travels.
Mérida number five municipality in home sales nationwide during 2017
CANCUN, Quintana Roo.- Benito Juárez was.
March 20: Day of the Guayabera in Merida
On March 20, the Guayabera Day.
Conversaciones con Amigos at Merida English Library
“Monday evenings from 7 to 9.
Spider monkey found inside a cage in a Mérida restaurant
Mérida, Yucatán.- The Federal Procurator for.
Strong earthquake below the coast of Guerrero, Mexico – March 20, 2018
Two earthquakes shook Mexico near Pinotepa.