IRS Questions?

Question

Will the IRS settle for less than you owe them?

It is not a question of fault. It is a question of life and death and doing a job most people would piss their pants even thinking about. It's not a fault game, its life. And cut and paste bullshit the IRS does. I was a 1099 and was almost killed. I had to leave country and live off my savings. It's not about "hype" or recruiters whatever. So stop posting that bull ****.

I appreciate your help anyway.

"The IRS has to follow the mandates of Congress. If Congress won't put in a combat zone exemption for civilians, the IRS can't give you one...."

True...

the weblink didn't work for some reason.

Answer 1

It's possibe, in rare cases. Don't believe the hype you see on the TV commercials. Keep in mind that there are 100 pennies in a dollar. A settlement for 99 cents on the dollar meets their claimed result.

The IRS may settle IF you debt does not include public trust fund monies (payroll tax withholdings from your employees). Generally they can settle for the highest amount that you could pay over a 5 year period, living a basis hand-to-mouth existence.

Your ramblings about leaving the country and nearly being killed are not a part of the factors the IRS will use in evaluating your Offer in Compromise.

Answer 2

Not based on the information you've supplied so far.

Look at form 656. Somewhere in the depths I believe it helps you calculate your "reasonable collection potential" and you should see what I see--you made the money and even though you've spent it already, you should be able to pay the back taxes back in the next 10 years.

Yes, it sucks, but it's not my fault you bought the recruiter's hype about stay 330 days and $85K is tax free. (The SE taxes would still have applied.) I would have told you plan on paying 40% and if you got the exclusion then and only then count on it as free money.

They only remaining question is a standard one, what kind of work were you doing? Are you sure you were a contractor or a misclassified employee? Contractors pay 15.3% in SE tax. W-2 employes pays 7.65%. You can file an SS-8 if there is any question that you might have been an employee. (At least one Blackwater security guard has been ruled to be an employee.)

I don't know how much you were getting paid per week or per day--knowing the 40% 1099/SE issues, a person knowledgeable in taxes would have told you not to take the job unless it paid double that of a W-2 *and* if it's a war zone, triple/quadruple.... Bad 1099 deals dig very deep tax holes and people spend years gettting out of them.

The IRS has to follow the mandates of Congress. If Congress won't put in a combat zone exemption for civilians, the IRS can't give you one....

Answer 3

Irs Questions

Answer 4

In your case, maybe, maybe not. An Offer in Compromise is a settlement with IRS where you pay less than 100 cents for every dollar you owe and IRS forgives the rest. It will do this if it determines you are offering as much or more as it could collect from you through monthly payments or seizing your property.

The amount you have to pay is, to use the IRS jargon, is "an amount that represents the reasonable collection potential of the account." This is a lump sum equal to what you could get from the equity in all your assets if they were sold at a quick sale, generally 80% plus 48 times what you could pay monthly on an installment agreement.

For example, if you had a car worth $10,000 and owed $5,000 on it and nothing else and IRS said you could make payments to IRS of $100 per month you would have to offer 80% of $10,000 minus the $5,000 owed = $3,000 PLUS 48 times $100 = $4,800 for a total of $7,800 on whatever you actually owed. You could make up to 24 monthly payments but would have to increase the 48 monthly payments to 60 for a total offer amount of $9,000 at $375 per month. How someone who could only pay $100 per month could be expected to pay $375 is a mystery.

I am an enrolled agent, licensed by the US Treasury Department who specializes in taxpayers who have large unpaid tax bills and prepare these for clients. You do not have to have a representative but the process can be pretty intimidating if you haven't had any experience. That decision is up to you.

For example, I had an offer for a client who owed a quarter million dollar liability accepted at 1 cent on the dollar. Many other clients have not qualified. The average nationwide for accepted offers is about 17 cents on the dollar. Your own affairs may be more complicated, and it probably are if you add a home and a 401(k) plan and a car that will be paid off in just a few years, you would have to go through these gyrations with every asset. Your case might also dictate an entirely different approach including getting the whole account put on ice for a few years or filing for bankruptcy.

If you want to hire a professional representative--enrolled agent, CPA or attorney--stay away from the ones that advertise on cable TV. Their fees can be heart stopping. Mine are a good deal less than half of what the "As Seen on TV" firms charge. If you want additional information outside this forum, you can email me through my profile.

Answer 5

can I deduct money i gave to grandchildren for college?

Answer 6

Can hearing aids be claimed as a taxable deduction?

Answer 7

My wife purchases stock thru here employer as part of a ESOP section of her 401K. She sold stock this year and the proceeds were placed in a cash account. Some cash was withdrawn earlier last year and tax was paid on that amount. My question is do we pay tax on the stock that was sold and transferred to a cash account or do we pay the tax when the money is withdrawn.

Answer 8

If you can prove to their satisfaction that you will never be able to pay off what you owe, you might be eligible for an offer in compromise, where they reduce what you owe. Filing an OIC though doesn't mean it gets approved -most don't.

Answer 9

Yes, they might depending on your ability to pay. But you need to take the first step to contact them and work out a payment plan with them.

Answer 10

My son started college full-time August 2015 and lives at home full-time. He works at Wal-Mart part-time. Can we carry him or does he file as single? we (parents) are paying for his college. Can we claim him for the time he was in high school last year (2015)?