Even if you can't pay your back taxes, a Certified Tax Resolution Specialist who is a tax attorney or CPA, can give you the help you need to settle your debt including negotiating a reasonable monthly payment plan or an offer in compromise settlement that pays a fraction of what is owed. If your IRS bill from back taxes is too much to handle, only a seasoned tax attorney, CPA or Certified Tax Resolution Specialist can provide tax help to show you the proper sequence of events to declare bankruptcy and completely eliminate all of your back tax debt, if you are eligible.
The best negotiation advice ever: Every one walks away a little “hurt.”
When fighting the IRS over your back taxes, you may feel manacled by the threat of tax liens, wage garnishments and jail time. But don't worry, a tax attorney or Certified Tax Resolution Specialist knows all sorts of expert strategies to give you the tax help you need to walk away from the IRS with your money and your freedom intact. The trick is partnering with a Certified Tax Resolution Specialist or a tax attorney to increase your chances of qualifying for an IRS payment plan, helping you settle your back tax debt for the lowest possible amount, and removing bank levies, tax liens or wage garnishments.
The best tax help a Certified Tax Resolution Specialist or tax attorney can offer is to broker an Offer in Compromise (OIC) settlement. While the IRS web site seems to make it easy to settle your back taxes by simply filling out an Offer in Compromise form, Uncle Sam's tax help brings serious dangers. Make one mistake and not only will you pay more than you have to, but your very freedom could be at stake. Instead of thinking of it as IRS help, you should look at the Offer In Compromise form as a plea agreement in a criminal trial. You are admitting your full back taxes liability in the hopes of a reduced sentence. Is it smart to try to broker a criminal plea agreement without the tax help of a Certified Tax Resolution Specialist or tax attorney? No way! Unless you're a Certified Tax Resolution Specialists or a tax attorney, leave tax settlements and Offers in Compromise negotiations to the experts.
New Offer In Compromise changes you need to know:
The Offer in Compromise (OIC) application is a challenging and burdensome process. The privilege of being approved for an OIC closely resembles receiving tax amnesty from the IRS. You can save thousands of dollars in back taxes, IRS tax penalties and interest. Recently, the IRS unveiled a simplified version of the OIC application form by splitting the original one into two parts: Form 656 and Form 656-B (Offer in Compromise Booklet). This new version of the application is more user-friendly and easier to understand.
The $10,000 Formula to Settle your Back Taxes
There is a simple guiding tax help formula about back taxes:
If you owe less than $10,000, and you haven’t been in trouble before - you can
call the IRS and they will hook you up with a payment plan to be paid in 36
monthly installments.
How Much Does the IRS Think You Are Worth?
An offer in compromise is an agreement between a taxpayer and the Internal Revenue Service that resolves the taxpayer's back tax liability, usually for a fraction of what’s owed. The taxpayer must file and pay his taxes on time for the next five years after acceptance…sort of like Tax Probation. The IRS settles for a lesser amount if there is doubt about the collectability of the amount over the remaining Collection Statute of Limitations vs. what they think they can collect now. If the IRS determines that receiving a lump sum now (albeit just a fraction of the amount owed) would be more than it would cost the agency, in overhead costs, over the remaining life of the collection statute, they will accept your offer.
The minimum offer amount must generally be equal to (or greater than) the taxpayer's reasonable collection potential (RCP). The RCP is defined as the total of the taxpayer's realizable value in real and personal assets, plus his/her future income. A Certified Tax Resolution Specialist or tax attorney can find ways to show the IRS that you're not Daddy Warbucks while providing tax help such as removing wage garnishments and reducing your back tax debt.
To Qualify for an IRS Payment Plan or Tax Settlement
Before your tax attorney or Certified Tax Resolution Specialist can make an Offer In Compromise or negotiate a payment plan with the IRS to settle your back taxes, you need to come clean and file all delinquent tax returns with the IRS.
DO NOT SUBMIT AN OIC TO DELAY OR HINDER COLLECTIONS
If the IRS believes you are just using the Offer in Compromise to delay
paying your debt or thinks you aren't acting in good faith; they can revoke
(return) OIC privileges to settle your back taxes debt. If you get on the wrong
side of the IRS, the individual IRS agent has a lot of latitude to decide what
they will allow you to do. An experienced Certified Tax Resolution Specialist
or tax attorney will have threaded that needle hundreds of times before, giving
clients back tax help without angering the IRS.
Why Some Offers in Compromise are More Likely to Get Accepted Than Others
Please note that in 2007, nationally, 46,000 Offers were submitted with
only 12,000 or about 26% were accepted. The acceptance rate of a good tax
attorney or Certified Tax Resolution Specialist, on the other hand, may be as
much as five times (approximately 90%) the national average. Why? Because
experienced Certified Tax Resolution Specialists or tax attorneys won't allow
clients to submit frivolous OICs. Sometimes the best tax help a tax attorney or
Certified Tax Resolution Specialist can give is to say "no" to a
client that is about to foolishly blow their hard earned money to settle their
IRS back taxes. You must financially qualify and eligible for this program.
Last resort: Learn How to File For Bankruptcy Correctly to Help Solve Tax Problems and Reduce IRS Debt
If the IRS rejects your Offer In Compromise or denies you the privilege of making one, you still have the right to declare bankruptcy, but even that is tricky without the help of a tax attorney or Certified Tax Resolution Specialist. To get the maximum tax help from this drastic step, you have to declare bankruptcy at the correct time to eliminate your back taxes. TIMING IS EVERYHTING HERE! But what most clients (who try this without the tax help of a tax attorney or Certified Tax Resolutions Specialist) don't know is that to completely discharge your back taxes debt you have to file on the correct date.
There are 3 general rules to be met to file for bankruptcy and discharge income taxes:
1) The income tax (payroll tax cannot be “bankrupted”) returns must be 3 years old or older than the due date,
including filed extensions;
2) The returns have to be filed with the IRS 24 months prior to the petition, therefore Substitutes for Returns (SFRs) do not count (an SFR must be replaced with an “original” filed return and then wait 24 months). It has to be an originally filed return. And it must have been filed at least two years prior to bankruptcy.
3) 240 days have to pass from the date of assessment. Date of assessment is usually the date of filing, but if the IRS does an audit and they assess
additional tax, that establishes a new assessment date for that year. So it is
possible for a taxpayer to have two or more assessment dates for one year. If
it’s used correctly, income taxes can definitely be discharged. You need a Certified Tax Resolution Specialist, or tax attorney, to properly analyze and interpret your IRS tax transcripts and Records of Account to determine when and if you are eligible.
For more information on how to resolve your back taxes and IRS problems, visit https://www.rozstrategies.com/ for a free tax relief consultation or call 866-IRS-PROBLEMS.
Michael Rozbruch, one of the nation's leading tax experts, is a Certified Tax Resolution Specialist (CTRS), licensed CPA in the state of Maryland and the founder of Tax Resolution Services (https://www.rozstrategies.com/ ). He teams up with an expert staff of tax attorneys, CPAs, and tax relief professionals to help individuals and small businesses solve their IRS problems with tax liens, unfiled back taxes, offers in compromise, wage levies, tax relief, delinquent returns, tax debt installment plans, bankruptcy and protecting an innocent spouse from unfair tax burdens.
[Note from HandelontheLaw.com: This article is to be used as an educational guide only and should not be interpreted as a legal consultation. Readers of this article are advised to seek an attorney if a legal consultation is needed. Laws may vary by state and are subject to change, thus the accuracy of this information can not be guaranteed. Readers act on this information solely at their own risk. Neither HandelontheLaw.com, or any of its affiliates, shall have any liability stemming from this article.]
