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IRS Lien Release With Offer in Compromise Acceptance

A Notice of Federal Tax Lien can provide a number of problems for a taxpayer.  Recently, the IRS has been releasing the Notice of Federal Tax Lien when a taxpayer successfully has an offer in compromise accepted by the IRS and pays the offer amount.  This is a wonderful benefit to the taxpayer as the IRS did not always release the tax lien upon payment of the settlement amount, but rather would wait for the five-year compliance period after the offer has been accepted.

The video below has been prepared by a tax attorney at The McGuire Law Firm to provide additional information regarding this issue.  If you have any type of tax issues with the Internal Revenue Service, contact The McGuire Law Firm to speak with a tax attorney.

Valuing Real Estate for an Offer in Compromise

When calculating an offer in compromise amount, one of the biggest issues is a taxpayer’s equity in assets.  If a taxpayer owns a home the equity in the home will need to be accounted for calculating the offer amount.  This brings about the pivotal question, how is real property or a home valued for the purposes of an offer in compromise with the IRS?  Unlike a bank account, stocks, bonds or other account with an easily ascertained fair market value, the value of land and/or a home is more subjective and at issue.

That being said, recently our position has to been to value the home at the most recently assessed tax assessment from the county.  Generally speaking, the Internal Revenue Service has agreed with this valuation.  If a taxpayer thinks the value of their home is less than the tax assessed value, you will want a formal appraisal conducted and you will need to show why the value is less than the tax assessed value.

If you have any questions related to a tax settlement or offer in compromise, please contact The McGuire Law Firm to speak with a tax attorney.  We offer a free consultation with a tax attorney to all potential clients.

Denver Tax Attorney

Amending an Offer in Compromise

When an offer in compromise is submitted to the IRS, the IRS may agree that the taxpayer is an offer candidate, but not agree with the original offer in compromise amount.  Thus, can the initial offer in compromise be amended?  Yes, the offer can be amended to reflect a different amount and terms.

This issue is discussed in the video below by John McGuire, a tax attorney at The McGuire Law Firm.

You can contact The McGuire Law Firm to speak with a tax attorney.

IRS Offer in Compromise Resource Page

The article below has been prepared to act as an IRS Offer in Compromise resource page whereby individuals can obtain necessary information regarding an IRS Offer in Compromise.  Please note, this information is not legal advice and should not supplement the advice of a tax attorney or tax professional.

What is an IRS Offer in Compromise?

An offer in compromise allows a taxpayer to settle their tax debt with the Internal Revenue Service for less than the total amount of tax owed.  Generally, the IRS will accept an offer in compromise if the offered amount by the taxpayer is the most the IRS could collect from the taxpayer within a certain period of time.

Offer In Compromise Pre Qualifier Tool

The IRS has an Offer in Compromise Pre Qualifier tool that can be very useful to taxpayers wondering if they would be eligible for an IRS Offer in Compromise.  The pre qualifier tool initially asks the taxpayer questions related to tax return filings, estimated payments and other tax payment & filing issues as well as bankruptcy (click for initial questions).  These issues could dictated whether or not a taxpayer is even eligible to submit an IRS Offer in Compromise.  Thereafter, the Offer in Compromise Pre Qualifier Tool asks financial questions related to income, expenses, assets, asset values and loans.  These financial questions break down a taxpayer’s equity in assets and disposable income which are the major factors considered by the IRS when accepting or rejecting an offer in compromise.

IRS Offer in Compromise Form

Form 656 is the form submitted to the IRS when submitting your offer in compromise.  Form 656 states the taxpayer’s information, the tax types and periods of which the taxpayer is attempting to settle, and perhaps most importantly, the offer in compromise amount and terms for payment.  In addition to Form 656, the taxpayer must submit the proper financial statement.  An individual taxpayer will submit Form 433A OIC, and a business taxpayer will submit Form 433B OIC.  If an individual has ownership interests in a business, the individual would likely need to file Form 433B for such business.

Where To Submit Your IRS Offer in Compromise

Your offer will initially be submitted to one of two offer in compromise units, which are in Memphis, TN and Holtsville, NY.  Where you live, will determine the office where you will file your offer.  The offer in compromise booklet provides the correct address based upon where you live.

What Decisions can the IRS make regarding my Offer?

The IRS can either accept, reject or return your offer.  Acceptance, of course would be preferred!  If the IRS rejects your offer, they may reject the amount, but agree to a larger amount and thus you may still be able to settle your tax debt.  You can also appeal the rejection by filing Form 13711.  The IRS will return an offer if, for example, the taxpayer is out of compliance.  You do not have appeal rights on a returned offer.

What Information is Public?

The IRS does make certain information regarding offers public.  Click, “information” for addresses of IRS offices with information open to public inspection.

Publication 594

IRS Publication 594 discusses the IRS collection process and may be useful to you as you are considering submitting an offer in compromise to the IRS.  Generally, submitting an offer to the IRS acts as a hold on enforcement.

If you have questions regarding the IRS Offer in Compromise process or your ability to settle a tax debt, you can discuss these issues with a tax attorney at The McGuire Law Firm.  A free consultation is provided to all clients.

IRS Offer in Compromise

Denver Offer in Compromise

Many people know that an offer in compromise is a tax settlement with the Internal Revenue Service.  But, why does the Internal Revenue Service and our government allow for such a tax settlement?  In many respects, you could compare an offer in compromise to a bankruptcy.  Of course, in a bankruptcy you are likely discharging or resolving multiple debts whereas an offer in compromise only resolves your tax debt with the IRS.  Just as an individual or business can file bankruptcy in an attempt to get a “fresh start” an individual or business may be able to settle their taxes with the IRS, and wipe out past debt and thus obtain a “fresh start” with the IRS.  Our government realized that in certain situations and circumstances, it is in the best interests of the government (and the taxpayer) to settle the debt.  Why should the IRS spend time and money attempting to collect a tax debt from a taxpayer that will never be able to settle or satisfy the tax debt?  In many respects, the time and effort of IRS revenue agents (and thus government money) is better spent working to collect the tax liabilities from those individuals and businesses that can pay the debt.  Thus, in some respects, I feel it comes down to a practical matter and the general policy followed by our government in recovering past due tax dollars.

The video below has been prepared by a tax attorney at The McGuire Law Firm to discuss what he considers as some of the policy matters behind an offer in compromise.

To speak with a tax attorney in Denver contact The McGuire Law Firm.  The McGuire Law Firm allows a free consultation so that you can discuss your tax matters, issues and/or problems with an attorney who can represent you before the Internal Revenue Service to resolve such issues.  Further, a tax attorney can help you with tax planning matters and other tax issues.  Contact The McGuire Law Firm today!

 

Denver Tax Lawyer Discusses Offer in Compromise Calculation

How much can I settle my IRS tax debt for?  I have heard, and answered this question many many times.  Of course, this is a common question for an individual or a business owner that owes taxes to the IRS.  My answer is always, “it depends.”  This is because the amount that the IRS will accept for an offer in compromise to resolve a tax debt is based up an equation related to a taxpayers ability to pay and not necessarily the total amount of the taxes owed to the IRS.  The IRS calculates an offer in compromise based upon a taxpayer’s reasonable collection potential which correlates to a taxpayer’s equity in assets and disposable income.  In regards to equity in assets this includes all assets from your home, car, retirement account, jewelry and anything and everything you own.  You may be able to receive a deduction in the fair market value of an asset for certain assets.  In calculating disposable income, the IRS will look at total income and your expenses, but they have established allowable expenses for items such as food, clothing, housing, utilities, transportation and other expenses.

The video below has been prepared by a Denver tax lawyer to provide additional information regarding the calculation of an IRS offer in compromise.  If you have a tax debt to the IRS and are questioning your ability to settle such debt, speak with a Denver tax lawyer at The McGuire Law Firm through a free consultation.

Denver Tax Lawyer Discusses Issues Regarding Offer in Compromise Equation

A Denver tax lawyer at The McGuire Law Firm can assist taxpayers in resolving their debts and potentially settling their tax debt with the IRS through an offer in compromise.  The video below provides general information regarding the offer in compromise equation and certain deductions and exemptions taxpayers may be able to receive when calculating their equity in assets.

 

Contact The McGuire Law Firm to schedule a consultation with a tax attorney in Denver or Golden, Colorado.

IRS Form 656 Discussed by Denver Tax Lawyer

A Denver tax lawyer at The McGuire Law Firm can assist you with IRS and tax matters.  Whether you need to resolve a tax debt or need assistance with tax planning or business tax matters and analysis, a tax lawyer at The McGuire Law Firm can help you or your business.  The video below has been prepared by a tax lawyer to provide information regarding IRS Form 656 (individual offer link), which is one of the forms that a taxpayer needs to complete when submitting an offer in compromise to the Internal Revenue Service.  An offer in compromise is a tax settlement with the IRS and may be a means by which you can pay less tax than what is owed to resolve your tax debt.

 

Contact The McGuire Law Firm to speak with a tax lawyer in Denver or Golden Colorado.  The McGuire Law Firm has law offices in Denver and Golden for your convenience and we offer a free consultation to all potential clients.

Tax Attorney in Denver Discusses IRS Form 433B OIC

IRS Form 433B OIC is the form a business would complete when compiling an offer in compromise in an attempt to settle their tax debt with the IRS.  John McGuire is a tax attorney at The McGuire Law Firm and has prepared the video below to provide some background and general information regarding Form 433B OIC.

 

Contact The McGuire Law Firm to schedule a free consultation with a tax attorney.  The McGuire Law Firm has law offices in Denver and Golden, Colorado.

Submitting an Offer in Compromise to the IRS by Denver Tax Attorney

The video below has been prepared by John McGuire, a tax attorney from The McGuire Law Firm regarding an IRS offer in compromise and submitting an offer in compromise to the IRS.  You can speak with a tax attorney by contacting The McGuire Law Firm, with offices in Denver and Golden Colorado.

 

Contact The McGuire Law Firm to schedule a free consultation with a tax attorney in Denver or Golden Colorado.