Offer in Compromise Can Be Taxpayer’s Great Hope

Burdened with a huge tax debt? Many Americans are. But the Offer in Compromise program can offer taxpayers relief from the nightmares of looming tax debt

By Darrin T.Mish, Esq.
-------------------------------

In my career, I’ve talked about the Offer in Compromise program thousands of times. Most times, the discussion is routine.

But it wasn’t last week.

The young couple came into my office. They were noticeably worn down. The woman looked tired and mentally exhausted. The man held his head low. Bags were beneath his eyes.

I had a good idea why they were here: tax debt.

About $110,000 in debt,” the man explained to me.

On his good days, he was handsome, dapper man. A 37-year-old father of two, he built a strong career as an entrepreneur and gave his family a comfortable life.

But he made one mistake: He took some bad tax advice. The IRS found out. And eventually he got the bill: six figures and change.

“We don’t have that kind of money,” his pretty wife explained.

And not many people do.

That’s when I told him about the Offer in Compromise: The IRS program allows taxpayers who are unable to pay their tax debt to negotiate a reasonable amount of money that they can pay. Often, this allows taxpayers to reduce their tax debt by pennies on the dollar.

You’re kidding, right?” the man said.

“No,” I replied. “I’m not.”

As I told the couple in my office, the IRS created the Offer in Compromise program after years and years of chasing deadbeat taxpayers door to door. That required a lot of resources and rarely resulted in efficient collections. By using the Offer in Compromise program, the IRS can settle debts in an efficient, friendly and reasonable way.

The way it works is simple.

A qualified tax professional will analyze the taxpayer’s previous returns to determine the exact amount of tax debt. Once that amount is established, the taxpayer and his tax professional will meet with IRS agents to discuss a settlement amount.

This amount will be negotiated based on the total tax debt and financial resources of the taxpayer.

Because many taxpayers, due to a variety of circumstances, are unable to pay anything close to the tax debt amount, negotiations often result in a settlement amount that is literally pennies on the dollar.

“It sounds too good to be true,” the man in my office told me.

“It isn’t,” I replied to his common response. “It’s possible that I could settle your debt like I’ve settled so many others.”

The man smiled. His wife grabbed his hand.

“You’re not kidding?” he asked.

I assured him I wasn’t. They both walked out of my office with smiles. It wasn’t routine.

Darrin T. Mish is a Nationally recognized Attorney whose practice focuses on representing clients across the United States with IRS Problems.He is AV rated by Martindale-Hubbel and is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. He has been honored by a listing in Martindale-Hubbel's Bar Register of Preeminent Lawyers. He can be reached at his website at http://www.getIRShelp.com