Offer In Compromise In Brighton, MI

The Fresh Start Program revised the calculation for taxpayer’s future income. It allows taxpayers to include student loan payments and payments on delinquent state and local tax debt as necessary expenses. It also increased the allowable living expenses that a taxpayer could claim.

Because of these IRS changes, many taxpayers that previously did not qualify for an Offer now do. However, just because the Offer program was expanded to allow more taxpayers to qualify, it does not mean it will remain that way. It also does not mean that successfully negotiating an Offer in Compromise is simple. It is important to have a qualified representative to represent you through the Offer process. If you owe back taxes, it is important to find out if you qualify for an Offer in Compromise under the current program. If you do, you need to act quickly to make sure that your Offer is accepted under the current rules.

The second form that must be attached to form 656 for an individual offer is form 433-A. This form lists out all of the asset information of the taxpayer and their monthly income and expenses. The IRS uses this form and the supporting documentation to analyze the taxpayer’s financial situation. This analysis, along with a review of the taxpayer’s total facts and circumstances, is then used to determine whether the taxpayer qualifies for an Offer in Compromise.

The IRS has an Offer in Compromise calculator on their website to assist taxpayers in determining if they qualify for an Offer in Compromise. Although this is a helpful tool, it does not replace the advice and expertise of a qualified tax debt expert. There are many factors that this calculator does not address. Its approval does not mean that your Offer will be accepted. In the same regard, just because the calculator states you will not qualify does not mean that you do not. It is best to speak with a representative that has experience successfully filing and negotiating Offers in Compromises with the IRS.

Taxpayers filing an Offer in Compromise need to send checks with their Offer for the $205.00 filing fee and 20% of their Offer amount. However, low-income taxpayers may qualify for a waiver of the filing fee. They will also not be required to send in the initial payment of 20% down with their Offer. The low-income certification is based on the gross monthly household income of the taxpayer and their family size. Businesses do not qualify for the low-income certification and must send in the required checks with their Offer in Compromise.

From our tax debt compromise experience with the IRS and the State of Michigan, these eight tips can be invaluable in how to get an Offer in Compromise approved.

1. Make sure that all required returns have been filed and processed by the IRS
2. Make sure that you are compliant in paying your current year taxes
3. Fill out the IRS forms clearly and accurately.
4. Do not fail to disclose assets or income. This can ruin your credibility with the IRS and is also a federal offense.
5. Sign all forms and mail them to the correct address along with the required filing fees and 20% down.
6. Include all requested supporting documentation. Make sure that you send copies, not your original documentation, as you will not get them back.
7. Timely response to IRS requests for information. Offer in Compromises are very time specific. Failing to meet a deadline can result in the IRS returning your Offer.
8. Hire an experienced representative, like Austin & Larson Tax Resolution, to prepare, file, and negotiate your Offer in Compromise. This is a lengthy and time consuming process. The IRS also has many collection rules and procedures that are complex. If you are not aware of them, you may not correctly calculate your eligibility and you will not know your rights in negotiating your Offer. The best thing you can do to ensure that your Offer is successful is to have an experienced representative on your side.