I have contacted an attorney and he said that it would cost me about 15k for him to file an offer in compromise and that when the agreement was made, as long as I kept up my end of the bargain, I would be free of debt to them in about 3 years. What would happen if I just went to the IRS and offered to give them the 15k myself, plus say another $7500. Would the IRS work with me direct? I owe probably over 100k.
2007-08-31 10:16:27 · 5 answers · asked by bigbaddave2001 1 in Business & Finance ➔ Taxes ➔ United States
You can work directly with the IRS on an offer in compromise. And I think the attorney is way overcharging you for his service.
2007-09-01 06:24:44 · answer #1 · answered by Anonymous · 1⤊ 0⤋
You can not just walk into the IRS office and offer cash on the counter in exchange for a settlement. You have to submit an Offer in Compromise form, which is a contract proposal between you and the government. It is accompanied by a Collection Information Statement. This is the basic form IRS uses to analyze a taxpayer's financial situation. It is accompanied by an extensive amount of backup attachments.
As an Enrolled Agent I am licensed by the US Treasury Department to represent taxpayers and as a specialist in collection issues, I prepare Offer in Compromise packages as a matter of routine. Preparation of this paperwork can be a daunting task as a do it yourself project which is why many people seek professional help. Even doing it professionally, I will make a number of contacts with clients to get updated and clarified information to get things just right.
The amount you have to pay IRS is an amount that it is satisfied represents the reasonable collection potential of the account. This is the amount is a lump sum equal to you could net by the quick sale of all you assets subject to an IRS levy plus 48 times what IRS feels you could pay on a monthly payment agreement.
The quoted attorney fee of $15,000 seems extremely high unless you have an extraordinarily complicated and large case or the attorney is trying to scare you off. My overhead is low so I can keep fees for most ordinary cases in the $1,000 to $1,500 range. If you would like some more information from me, you can click on my Answers picture (such as it is) and send me Yahoo email and I can give you more information.
2007-08-31 15:27:00 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The only "settlement" option available for you to use with the IRS is the Offer In Compromise. There is no other way to get them to take less. It is that way by law.
With and Offer In Compromise you add up everything you owe and make an offer based on that. If your assets plus your earning power over the next 4 years exceeds your debt, the offer will be rejected. OICs are for people who for what ever reason can not pay the IRS. They are not for people who do not want to pay the IRS. The IRS has two years to decide and they say "No" over 80% of the time.
If you have the assets available, just pay them. The will not accept anything less if you have the ability to pay them in full.
2007-08-31 12:51:33 · answer #3 · answered by Wayne Z 7 · 2⤊ 0⤋
The IRS does have payment plan options. If you inquire about them yourself they do have various options available. The key is do not ignore them. But if you call them and let them know that you need a payment plan they will accommodate you because their biggest goal is getting their money. They may ask you about what you can pay. Some of their payment plans can go as low as paying 25 dollars a month but you may not want that because it will take you forever to pay it off.
I hope this works for you. Best wishes
2007-08-31 10:28:04 · answer #4 · answered by Flourqueen 3 · 0⤊ 0⤋
It's worth a try... if they say no, then you can still go to a lawyer.
2007-08-31 10:24:21 · answer #5 · answered by Anonymous · 1⤊ 0⤋