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IRS Debts Offer in Compromise Tax Procedure

Forgotten Offer in Compromise Extended IRS Collection Time

Sometimes it is best to wait for the IRS’s collection statute to expire. This is a wait-and-see approach where the taxpayer waits to see if the IRS attempts to collect the tax debt. To succeed, it is important for the taxpayer to not extend the IRS’s collection statute. This issue came to a head in […]

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Bankruptcy Tax IRS Debts Offer in Compromise Tax Procedure

Discharging Taxes in Bankruptcy vs. Settling with the IRS

Bankruptcy can be one of the best methods for resolving tax debts. This is particularly true if the taxpayer’s primary assets only consist of retirement accounts and equity in a personal residence. The recent In re Moore, No. 15-42046 (Bankr. E.D. Tex. Jul. 7, 2016), case presents an opportunity to consider the results if the […]

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IRS Debts Offer in Compromise Tax Procedure

Informal Offer in Compromise? Is There Such a Thing?

What if you reach an oral agreement with the IRS to settle the tax debt, but then the IRS back tracks on the agreement? If you didn’t submit the offer on a Form 656, do you have any rights? The court addresses this in Bergdale v. Commissioner, T.C. Memo. 2014-152. Facts & Procedural History Mr. […]

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IRS Debts Offer in Compromise Tax Procedure

Example of How the IRS Evaluates Offer in Compromise for Doubt as to Collectibility

In Zumo v. Commissioner, T.C. Summary Opinion 2013-66, the U.S. Tax Court concluded that the IRS was correct in rejecting an offer in compromise based on doubt as to collectibility. The case provides a good overview of the IRS collection process and how the IRS evaluates offers in compromise. Facts & Procedural History Dr. Zumo […]

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IRS Debts Offer in Compromise Tax Procedure

Offer in Compromise Rejected Where Records of Household Member Not Provided

In Winters v. Commissioner, T.C. Memo. 2012-183, the U.S. Tax Court concluded that the IRS correctly rejected an offer in compromise submitted based on doubt as to collectibility based in part on the taxpayer not providing records to establish the income of a person who resided in his home. Facts & Procedural History Mr. Winters […]

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IRS Debts Offer in Compromise Tax Procedure

Offer in Compromise: Documenting the Value of Assets

The IRS carefully examines the value of the taxpayer’s assets when it considers whether to accept an offer in compromise based on doubt as to collectiblity. Even a few dollars can result in a rejected offer. Substantiation is key. The Wright v. Commissioner, T.C. Memo. 2008-259, case is an example. It involves a $2,000 offer […]

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IRS Debts Offer in Compromise Tax Procedure

Offer in Compromise: The Coming Storm?

The Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) makes substantial changes to the IRS offer in compromise program. Most notably, TIPRA includes a provision in which taxpayer submitted offer in compromises are “deemed” accepted by the IRS. The OIC Process  The offer in compromise or OIC program for compromising tax debts for less […]