New Options For The IRS Offer In Compromise

The IRS Now Accepts Installment Payments on Offer In Compromise Tax Settlements

The IRS has made available several new payment options for troubled taxpayers

For those who have had their offer in compromise accepted by the IRS and not fallen into the category of taxpayer who either is experiencing extreme hardship or did not actually owe the IRS the taxes, the amount settled on may still be a daunting amount of money. By the time the IRS calculates your reasonable collect ability and value of assets at quick sale you may still arrive at a large but more manageable number. For this situation that IRS has made new payment options available to give themselves the best chance of collection your hard earned money.

The new IRS payment options for an Offer In Compromise Include:

An Offer In Compromise Cash Offer

The Cash offer has one big advantage if the taxpayer is able to do it. The IRS will calculate the reasonable collect ability from future income potential from 48 months of income not the usual 60 months. This saves a significant amount of money. However the taxpayer has only 90 days from the agreed ed offer in compromise to pay the full amount or the agreement will be void and the IRS will resume collection attempts on the full amount.

Offer In Compromise Short Term Deferred Payment Offer

The IRS will accept payment towards the offer in compromise agreement over two years in monthly payments. The amount owed will be calculated by adding the value of your assets at a quick sale plus your monthly disposable income in a sixty month period.

Offer In Compromise Deferred Payments Offer

This option is the longest time-frame to pay back the tax debt. But the IRS never gives anything away for free! In exchange for the longer time-frame to payback the debt, the IRS will calculate the amount owed by adding the value of your assets at a quick sale plus the your monthly disposable income - and this is the catch - over the entire time left in the statute of limitations for collection taxes. Obviously because this may be a longer time period it will add up to significantly more money, however it may end up being a smaller payment.

The IRS is even offering several ways to structure differed payment including:

Full payment of the realizable value of your assets within 90 days for the date the IRS accepts your Offer in Compromise; and

Your future income in monthly payments during the remaining life of the collection statute.

Cash payment for a portion of the realizable value of your assets within 90 days from the date the IRS accepts your Offer in Compromise; and

Monthly payments during the remaining life of the collection statute for both the balances of the realizable value and your future income;

The entire offer amount in monthly payments over the life of the collection statute. Just as with short-term deferred payment offers.

As you can see the IRS has created many options available to make collection the back tax debt before a statute of limitations has expired. Depending on the taxpayers financial situation and extenuating circumstances a tax attorney should be able to help decide which payment option is the best choice.

About the Author

As a dedicated IRS Tax Lawyer Mary has been helping clients get tax debt relief by negotiating currently non-collectible status, offers in compromise, installment agreements, innocent spouse cases, audits, removing levies, releasing liens, and negotiating penalty abatement. Mary's career as a IRS tax attorney began in 1993 after graduating from Stetson University College of Law. She graduated

Author (getmejustice). Submitted on Thu, 4 Aug 2011 Time: 2:13 PM

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