In the past several months three of my clients were able to settle their IRS debt through the Offer in Compromise program. If you owe back taxes this is a good time to explore this option.
What is an Offer in Compromise?
An Offer in Compromise can allow a taxpayer with IRS debt to offer to pay what you can afford. Corporations, LLCs, and other entities can also take advantage of Offers in Compromise. If the IRS believes the Offer amount is equal to or more than what the Service could otherwise collect from the Taxpayer it will accept the offered amount to compromise the remaining tax liability. Last year we got an Offer through for a client who did not have any equity in his assets and did not have any income over and above his monthly necessary living expenses. The IRS accepted a onetime payment of $300.00 to compromise over $80,000 in tax liabilities. Tax liabilities that can be compromised include income taxes (1040), payroll taxes (941), trust fund recovery penalties, and more.
$281,000 IRS debt settle for $19,000.
Another example, one recent case involved a client who owned a business and had equity in his home. He was able to demonstrate and the IRS agreed that his monthly necessary living expenses equaled or exceeded his monthly income. In that case, the amount that the IRS determined was collectible was just over $19,000. The IRS accepted the client’s offer of $19,040.00 to compromise over $281,000 in taxes.
I have been doing Offers in Compromises for more than 24 years, essentially since the program first began. Without a doubt, this is one of the most favorable times to get an offer accepted that I have experienced. If you want to explore this option, give me a call.
by Norm Short, J.D., LL.M. Taxation
New IRS phone scam threatens immediate arrest
art by Anecdoteak
by Norman Short, Partner
A new and vicious phone scam has reached the Puget Sound area in which the caller poses as an IRS (Internal Revenue Service) agent and dramatically threatens immediate arrest. I’ve received a report of a phone call made to one of our clients. The phony agent used a dramatic, threatening voice. He said that she owed back taxes and fees. If she didn’t pay that day with a prepaid card, she would be arrested at once. The threatening voice then recited her address and gave her a number to call to pay.
Needless to say, she was terrified. Fortunately, she had the presence of mind to check it out with the IRS.
IRS agents will not contact you by phone
There are very rare exceptions to this rule. If you do get a phone call from someone claiming to be with the IRS, tell them you will call the IRS. Then, ask for identification, including badge number. No legitimate agent will object to your checking out his or her validity. Call the IRS verification number: 800-366-4484. These scams come and go and cost their victims millions financially, as well as emotional pain. The IRS just issued a warning a few days ago. So, be prepared and prepare others in your household to respond calmly to this vicious phone scam.
In fact, the IRS states:
The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. This includes requests for PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts.
You may want to check out the IRS resource page on scams for more information. If you have been a victim of one of these scams, use this U. S. Treasury report form.
Norman Short, a Partner at GSJones Law Group, focuses on financial law. He earned an advanced law degree (LL.M) in tax law in 1992 and was admitted to practice before the U.S. Tax Court in 1995. He helps people with tax issues, business formation, and estate planning law.