Streamlined Offer in Compromise Program Update

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As the GAO, the National Taxpayer Advocate, and others have turned up the heat on pressuring the IRS to explain some of its collections policies, the Commissioner has had a harder time standing behind some of the more damaging actions the agency visits on taxpayers. In February 2011, the IRS Commissioner announced the IRS would be focused on helping taxpayers with outstanding tax debt get a “fresh start.” This new fresh start initiative is designed to hedge some of the more aggressive IRS collection practices that damage a taxpayer’s financial position long-term. 

Immediately following the initial IRS release in February, Tax Masters was asked by practitioners and interested media parties alike specifically about the Streamlined Offer in Compromise Program. As reported in the 2010 National Taxpayer Advocate’s Report to Congress, the IRS began a pilot program in May 2010 to test new procedures to “increase efficiencies and improve the quality of OIC case decisions.” Because the Commissioner announced the streamlined OIC program in February, our assumption is the pilot program was a smash success. The trouble was, no one knew what the streamlined program looked like except IRS insiders directly involved with the pilot. Four months later, the IRS has pulled the curtain back and further defined just what the Commissioner was talking about when he announced the streamlined OIC.

What Delinquent Taxpayers Need to Know About the Streamlined Offer in Compromise Program

The expanded Streamlined Offer in Compromise program includes:

• Fewer requests for additional financial information
• Requests for additional information by phone instead of by snail mail, when required
• Greater flexibility on the part of the IRS when determining your ability to pay

According to the Streamlined Offer in Compromise Program page on the IRS website, taxpayers who owe a tax debt may qualify if they:

• Earn wages through an employer, either by W2 or 1099
• Are currently unemployed or out of work
• Are self-employed with no employees and gross under $500,000 per year

The IRS site further states that you may be eligible for the streamlined program if:

• Your household income is less than $100,000, and
• Your total tax debt is less than $50,000 when you file your offer in compromise

How to Take Advantage of the Streamlined OIC

If you believe you qualify for a streamlined offer in compromise you should call us today. Tax Masters will protect you while we help you file all delinquent tax returns and regain compliance with the IRS. While we are doing the work to get you back in compliance, we will work with you to complete a 433 Financial Analysis, which will show you whether you should qualify for the Streamlined Offer in Compromise Program. After you regain compliance and file all your old returns, we will be glad to help you submit an offer in compromise if our financial analysis indicates you should qualify. The best part? You don’t pay for any TaxMasters offer in compromise preparation services unless the IRS accepts your offer. You would still be responsible for the $150 application fee.

You must act to take advantage of the new Streamlined Offer in Compromise Program. The IRS will not contact you to let you know you qualify. The IRS has opened the door for those of you with tax debts under $50,000. Will you walk through it? Or will you wait and let the IRS take a little of what you own at a time until it is gone?

Don’t let this opportunity pass you by if you owe the IRS and cannot afford to pay the tax. The IRS is trying to give you a fresh start. Take your first step toward a fresh start today and call us now at (800) 581-0456.

Don’t Know What the Offer in Compromise Is? Ask Noah!

Tax Masters–Streamlined Offer in Compromise Update

Taxpayers Fear the IRS–Nina Olson Interview on ABC News

As usual, ABC News missed the mark in their interview of Nina Olson, the National Taxpayer Advocate with the IRS. ABC had the opportunity to speak to the National Taxpayer Advocate about tax problems and chose to air more information about the symptom of tax disease (tax debt) than about the problem itself (IRS compliance). The simple fact remains that most tax problems begin and end with tax compliance issues, like failing to file tax returns, failing to make quarterly estimated tax payments on time, or failing to make payroll tax payments when they are due. The vast majority of people who come to Tax Masters with tax problems have tax compliance issues. They may want to settle their tax debt, and invariably everyone with a tax debt wants to find some way out of their situation, but that settlement is not possible until the taxpayer files all their delinquent tax returns and makes any currently due quarterly or payroll tax payments.

While ABC News focused on the debt issue, they did not include any content from the Nina Olson interview addressing how to regain compliance and the importance of doing so.

At Tax Masters, we have been asking for years, the right questions. This is direct content from Patrick Cox, Tax Masters’ CEO and founder. ”Are you being audited? Have you not filed tax returns for years? Has the IRS come to your home or place of business? The IRS will relentlessly pursue you for unpaid taxes. TaxMasters can get between you and the IRS. We’ll make sure they treat you fairly and treat you with respect.”

ABC News chose to focus on “pennies on the dollar” tax settlements and, in doing so, failed the American taxpayer dramatically. The focus needs to be on compliance. If, after a taxpayer is back in compliance with the IRS and still owes a tax debt, he or she can often afford an IRS payment plan. If the taxpayer cannot afford to pay the IRS, cannot afford a payment plan, and has no assets, there are other collections alternatives like partial payment installment agreements, currently uncollectible status, and the holy grail of tax relief, the offer in compromise.

ABC News failed to focus on the core issue of tax woes. Instead of discussing the issue, tax compiance, they chose to concentrate on the symptom, which is tax debt. Shame on you, ABC. You should have listened.

Transcript of ABC News Interview of Nina Olson

ABC News: Can I trust the IRS to work with me on my tax problem?

Nina Olson, National Taxpayer Advocate: Taxpayers fear the IRS and there’s a reason for that. The IRS is the most powerful creditor in the United States. We have awesome collection powers. And so there’s a basis for that fear. But that fear can be exploited so that taxpayers aren’t even willing or aren’t comfortable doing something that could protect themselves; just picking up the phone and talking to the IRS and walking through the problem, or even reaching out to my organization, the Taxpayer Advocate Service if they’re really having an economic hardship. We can help you and we can get collection activity stopped while we try to solve the problem.

ABC News: Is it possible to settle my IRS debt “pennies on the dollar?”

Nina Olson, National Taxpayer Advocate: Actually it can happen that because of your ability to pay. You know, if you have such reduced ability to pay, you may end up paying what could be pennies on the dollar of what you owe to the IRS. But it’s not an easy thing and you have to show the government, you have to show the IRS, that they are not going to be able to get any more money out of you than pennies on the dollar. And if that’s the truth, then you can settle with the IRS for that amount. But to say that you’d be able to do that routinely is just not true.

ABC News: How does the IRS determine whether I qualify to settle my debt for less than I owe?

Nina Olson, National Taxpayer Advocate: What the IRS does is it looks not only at your income and your expenses, but it looks at all your assets. You know, what is your net equity in assets? And so we’re getting a whole complete financial picture as well as mitigating circumstances like illnesses or job loss. But, you’re really looking at the financial picture and then deciding what is that person’s ability to pay?

ABC News: If I want to hire someone to help me with getting a collection hold, who should it be?

Nina Olson, National Taxpayer Advocate: Someone at the company who is qualified to practice before the IRS. It has to be an attorney, a CPA, or what’s called an Enrolled Agent, someone who’s taken a test to practice before the IRS. That person has to call on your behalf and they have to let the IRS know that they are there, that they have been hired to represent you. And then they can talk to the IRS about getting a collection hold. Now you too, a taxpayer, can call the IRS and ask for a collection hold and, you know until they can work out some collection alternatives like an installment agreement or an offer in compromise. A lot of this the taxpayer can do him or herself. But a lot of taxpayers are frightened of doing that themselves.

ABC News Interview of Nina Olson, National Taxpayer Advocate

ABC News Tax Masters – Taxpayers Fear the IRS – Nina Olson, National Taxpayer Advocate