The IRS is authorized to accept less than the total amount of a tax liability under certain circumstances. Just about everyone has seen the advertisements of tax-resolution companies who claim to “settle your tax debts for pennies on the dollar!” What they don’t tell you is: do they settle for 5 pennies on the dollar or 95 pennies on the dollar? Further, many tax-resolution companies, such as Tax Masters, “the tax lady” Roni Deutch, American Tax Relief, and JK Harris & Company, perform so poorly that they are either sued by former clients or sued by state governments—or both—until they go out of business. This is where experienced tax counsel can mean the difference between a successful Offer in Compromise and an expensive waste of your valuable time and resources.
An Offer in Compromise (OIC) is good for taxpayers who don’t make a lot of money and who have little, if any, assets. There are three ways to file an OIC, but I’ve found that the one that produces the most success (for a variety of reasons) is the “cash” offer, which means that the IRS accepts the amount you offer, and you have up 5 monthly installments within which to satisfy the obligation. The cash offer does not mean that you must pay all of the offered amount at once, and frequently you will have at least 12 months from the time you file the OIC until you need to begin payments.
If you think you may be a good candidate for an OIC, please call Dave at 303-454-8260. David A. Sprecace has more than 23 years of experience filing OICs, and may be able to help you, too. You may also email Dave at Dave@MyTaxLex.com to set up a phone consultation.