22 June 2020

What you need to know about IRS Offers and Tax Compliance – Don’t screw it up!

Thinking about requesting an Offer-in-Compromise from the IRS? Start with Compliance!

The IRS won’t even look at your Offer if you are not in compliance. It will be returned faster than you can say, “what’d I do???”

Here is where to start.

File your taxes. You need to be current on your filings, personal income taxes or payroll taxes for a business. Don’t worry, if you haven’t filed since the Bush administration you usually only need to file the last 6 years.
Pay your current taxes. This means either estimated taxes or payroll tax deposits. If you are not showing that you can behavior and pay your taxes, the IRS won’t consider your Offer.
Be sure to wait until you have received the first tax bill for each year you are including in your Offer.

Once you have filed your tax returns and are paying the current taxes you can submit your Offer.

Here are a few things to keep in mind when you submit your offer.

Before you send in your Offer confirm the application fee has not increased.
Send in two separate checks. One for the application fee and one for the Initial payment.
Designate the initial payment in YOUR best interest. If you don’t, the IRS will apply it to theirs.
Don’t miss one of the periodic payments while your offer is being considered. This will delay the process and could cause your offer to be rejected.
The IRS will usually not entertain an offer for less than your Reasonable Collection Potential (RCP). Use that amount as your starting point for your Offer amount.

The Offer-In-Compromise program is a lengthy and complicated process. Get off to a solid start by following these tips.

Have questions about whether an Offer-In-Compromise is right for you? Contact me.

Jeff Roltgen, Tax Rescue CPA
Jeff@TaxRescueCPA.com
www.TaxRescueCPA.com

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