Offer in Compromise

In May of 2012 the IRS announced its Fresh Start initiative -announcing far more flexible terms to its Offer in Compromise, or OIC, program which helps tax debtors settle their tax debt. The acceptance bar is the easiest in history!

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Settle Your Tax Debt through an Offer in Compromise

This is truly a once in a lifetime opportunity for a distressed tax debtor to settle his or her tax debt. You can avoid bankruptcy, and if you qualify, settle hundreds of thousands of taxes for cents on the dollar. High and low income taxpayers can qualify! You simply have to be willing to come into current compliance on current and future taxes.

Recent Changes to the Offer in Compromise Program

The changes are astonishing. Previously, taxpayers would pay over 60 months or even a ten-year collection statute. The future income used to calculate disposable income to pay the taxes is now only 24 months. It can even be one year of future income if the taxpayer can pay in five months or less! The IRS is even allowing the payment of student loans and delinquent state taxes because they have expanded the allowable living expense categories and amounts.

The IRS is also excluding the equity in income producing assets in on-going businesses. Yes! Back payroll taxes, as well as income taxes, may be compromised if you qualify. If a business, for instance, depends upon a 100 K machine and cannot operate without it then the new Offer in Compromise (OIC) rules exclude the equity in the machine. The new Offer in Compromise program dramatically expands the universe of tax payers eligible to compromise their outstanding tax obligations.

Cash in bank is reduced by a thousand dollars plus the taxpayer’s allowable living expenses for a month. If the taxpayer’s monthly living expenses are four thousand dollars a month, and the average balance in the bank account is five thousand dollars, the entire amount is excluded from the offer in compromise calculation.

Up to $3,450 in equity per car in a household is excluded of vehicles owned by a taxpayer. When the taxpayer owns a vehicle that is six years or older or has mileage of 75,000 miles or more, an additional $200 of additional operating expenses are allowed up to two cars per household.

Wage Levies and the Offer in Compromise Program

Facing wage or bank account levies? RRA98 with respect to Offer in Compromise prohibits collecting a tax liability by levy during any period an Offer in Compromise is being processed. Once you have paid your accepted Offer amount, the IRS will release any Notice of Federal Tax Lien…a fresh start!

Take Advantage of the OIC Program Today!

What are you waiting for? If you owe back taxes, act today! This fresh start window may not stay open, and the pendulum may regrettably swing back and the IRS turn harsh again.