Our client came to with a tax bill totaling just over $22,000. He needed to file a few tax returns and also needed to deal with the outstanding issues facing him from the IRS. He was scared, unsure as to where to go, and moreover what to do about his IRS tax situation. He knew he wanted an IRS Offer in Compromise Settlement but was unsure as to how to get there.
We immediately began by contacting the IRS to obtain a collection hold. We needed to be sure to obtain a collection hold in order to keep the IRS from levying his bank accounts, garnishing wages, or preparing returns on his behalf. We needed time free from enforcement to figure out the best strategy to fit his needs, more importantly if he qualified for an IRS Offer in Compromise. We were afforded 60 days from the IRS to get all missing returns filed as well as prepare a financial statement to disclose an anticipated resolution strategy. Lastly, the client was not current with estimated payments, and in order to qualify for any resolution, the taxpayer needed to be current with his payments to the IRS as a self-employed individual.
Once the taxpayer prepared his back tax returns, he did have small balances, but overall, we needed to be sure he filed the returns. Once the returns were sent in, we reviewed his financial situation. He did not show an ability to pay the IRS on a monthly basis, and therefore, we arrived at the conclusion he qualified for an IRS Offer In Compromise. Prior to filing for an IRS Offer in Compromise we needed to be sure the client remained current with his estimated deposits. Therefore, we opted to place his file with the IRS into a Currently Non-Collectible status. This would buy us the time necessary to insure the client remained current throughout the year.
After 6 months or so, the client was able to prove he could remain current and compliant. Therefore, we had him come into the office and supply us with updated financial information, along with additional information concerning his financial status. Since he owed less than $50,000 (which is an IRS threshold for smaller versus larger dollar cases), the Offer was worked within a period of about 6 months or so, and agreed to. We settled for $2,000 on the $22,000 IRS bill. The taxpayer has remained current and compliant since (a part of the OIC rules and regulations), and he only had to pay the IRS $2,000.
If you or someone you know can’t afford to pay back their IRS tax liability, is looking for an approved IRS Offer in Compromise, and you’re not sure why or how to fix the issue, give us a call at 720-398-6088. We will be pleased to assist!