According to 911 Tax Relief, it is never easy to convince the IRS to go with the “pennies on the dollar” settlement. On some instances this does happen, but only if it’s clear that the taxpayer does not have the asset and/or the capacity to pay off the tax liability on a given time frame.
Los Angeles, CA -- (SBWIRE) -- 09/18/2014 -- Everybody probably have heard it on the radio and seen the commercials on television: A pitchman who is giving the assurance that one can settle his tax liability for “pennies on the dollar” simply by hiring the law firm. With their “extraordinary” negotiating skills and inside knowledge on how IRS works, they are able to get their clients out of the liability. Can they really? 911 Tax Relief unveils the truth behind the settling of tax debt with the IRS.
According to 911 Tax Relief, it is never easy to convince the IRS to go with the “pennies on the dollar” settlement. On some instances this does happen, but only if it’s clear that the taxpayer does not have the asset and/or the capacity to pay off the tax liability on a given time frame. If the taxpayer has the money to pay the IRS – or there will be a chance that he will have the amount in the near future – there will be no negotiation that will convince the IRS to settle for less than what the taxpayer owe. Regardless whether the taxpayer represents himself or hire the service of an expensive law firm.
These commercials are referring to the offer in compromise (OIC) and are hoping that the IRS will accept it. An offer in compromise is a conformity between the taxpayer and the IRS that will settle the taxpayer’s liabilities for less than what he originally owed. 911 Tax Relies states that IRS will only accept the OIC under these circumstances:
-The taxpayer is not capable of paying the full amount on a given time frame, either in lump sum or over time through a payment settlement.
-There is a doubt on the amount of the tax liability, this is unusual though. Or
-Because of exceptional circumstances, paying the full amount owed will cause an “economic hardship” or be “unfair” or “inequitable” – for example, the tax payer can no longer work due to health issues, or he’ll be left with no money to pay or his basic living expenses after selling his assets to pay the liability in full.
To come up with the above conclusion, the IRS goes in depth with the taxpayer’s assets and income to determine his "reasonable collection potential." It is a must for a taxpayer to provide a detailed information about his financial situation on IRS Form 433-A, Collection Information Statement. This is inclusive of verifiable information about his cash, investments, available credit, assets, income, and debt. In addition to property, the RCP also includes the taxpayer’s projected future income, less amounts allowed for basic living expenses.
The amount of taxpayer’s offer must commensurate the "realizable value" of his assets plus the amount of money the IRS could take from his future income.
Furthermore, prior to submitting the OIC, is a must to (1) file all tax returns that are legally required to file, (2) make all mandatory estimated tax payments for the current year, and (3) make all compulsory federal tax deposits for the current quarter if the taxpayer is a business owner with employees.
911 Tax Relief reminds the public, most OICs, personally or professionally prepared are rejected by the IRS. It is not necessary to hire a law firm or other tax professional to make an OIC not unless he doesn't have the time to do so. The process is quite simple, the taxpayer must file IRS Form 656, Offer in Compromise and pay a $150 nonrefundable application fee and then just let it roll and wait for the IRS’ verdict.
About 911 Tax Relief
911 Tax Relief was officially founded in 2010, their professional staff members have been in the tax industry for many years. As a tax debt relief provider, they have successfully helped their clients gain the tax debt relief they needed.
Their team is comprised of skilled tax professionals, licensed agents and in-house staff members. Together they unite to mediate and resolve the most common or complicated tax issues today. Every department works efficiently to give the highest level of care to their clients.