RONALD J. CAPPUCCIO, JD, LLM (TAX)


TAX, BUSINESS AND ESTATE ATTORNEY

QUESTIONS
856.665.2121

Reduce Taxes by IRS Offer in Compromise

Tax settlements with the IRS can help avoid an unnecessary bankruptcy and can end the nightmare of bank levies, asset seizures, and wage executions. An effective Offer can provide a reasonable tax settlement that will eliminate excessive and burdensome tax payments. Don't be fooled by scam artists that promise "pennies on the dollar" settlements. Yes, it is true that I have gotten exceptional deals for a few clients, nevertheless the determination of the Offer amount is based upon your assets, liabilities and income.

Special Rules for Unemployed Taxpayers

Starting March, 2010, IRS employees will be permitted to consider a taxpayer’s current income and potential for future income when negotiating an offer in compromise. Normally, the standard practice is to judge an offer amount on a taxpayer’s earnings in prior years. This new step provides greater flexibility when considering offers in compromise from the unemployed. The IRS may also require that a taxpayer entering into an offer in compromise agree to pay more if the taxpayer’s financial situation improves significantly.

How to Get an Offer in Compromise

The Offer in Compromise process for reducing tax liability has three basic elements:

  • Your tax attorney prepares a proposal ("Offer")
  • The IRS considers and grants the settlement request ("Compromise.")
  • You must make a 20% NonRefundable payment to the IRS.

This difficult and time consuming process of lowering your taxes can be very valuable.