Most of what you've read online about IRS problems is wrong, or at least misleading. I'm Darrin Mish. I practice tax law in Tampa and I've been doing this for 32 years. Here's what's actually true.<\/p>\n
On July 23rd the Wall Street Journal<\/a> online edition published an article about a settlement between a well known nationwide tax problem resolution firm and 18 states in reference to misleading advertisements. The article pays particular attention to what the IRS refers to as unrealistic results promised by tax resolution firms with the \u201cOffer In Compromise\u201d as an alternative to other forms of collection. <\/a>As well, peppered throughout the article, are stories of dissatisfied taxpayers who payed \u201cthousands\u201d of dollars to the tax resolution firm but didn\u2019t receive the results they expected. The article doesn\u2019t go so far as to negate the OIC as a solution to a taxpayer\u2019s problem, but it certainly places it squarely in the \u201cnot likely to happen\u201d category. It is unfortunate that the WSJ chose to paint this picture as there are glaring omissions regarding the OIC that make it a very realistic solution to many taxpayers. Additionally, there are several settlement options for a taxpayer outside the OIC, but the article only mentions installment agreements<\/a>.<\/p>\n Click here to read or watch more IRS Problem resources.<\/a><\/p>\n Typically, the IRS is quoted as blaming \u201cfrivolous\u201d Offer Filings by tax professionals in efforts to \u201cstall\u201d collection activity as it\u2019s primary reasoning for the rejection of more and more Offers. It shouldn\u2019t surprise you that this position is a \u201cred herring.\u201d Although the filing of an OIC suspends the ability of the IRS to levy a taxpayer\u2019s wages and bank accounts while the OIC is pending, it also \u201ctolls\u201d the collection statute.<\/a> The IRS generally has 10 years from the date of assessment to collect taxes owed by a taxpayer. However, this period is \u201ctolled\u201d (stopped from running) and thereby extended when an OIC is pending. The IRS doesn\u2019t lose any of its legally permitted time to collect an outstanding tax liability when an OIC is filed. In fact one could argue that the IRS gains an exact \u201croadmap\u201d to the location of a taxpayer\u2019s assets when an OIC is filed. This is largely because in order for an OIC to be considered \u201cprocessable\u201d the taxpayer must submit a financial statement (Form 433 A and\/or B) along with three months of supporting documentation, including bank account numbers.<\/p>\n When the OIC is rejected this \u201croadmap\u201d gives the IRS a jump on filing a levy or seizing a taxpayer\u2019s assets. This reasoning exposes the flip-side of the debate, which is that the IRS routinely rejects Offers in Compromise, in order to gain the upper hand in more aggressive collection activity. This viewpoint is supported by the large number of properly filed offers that are initially rejected but later accepted on appeal. It\u2019s no wonder that there is a growing perception that the IRS breeds a \u201cculture of frustration\u201d designed to get taxpayers to give up and pay rather than pursue a collection alternative they might otherwise qualify for.<\/p>\n It is certainly true that an Offer In Compromise<\/a> is not the solution for every tax problem, maybe not even most. However, a closer look at the facts involving the OIC would draw the critical thinker to a much different conclusion than the position taken by the WSJ. First, most taxpayers give up and pay out of frustration when they would otherwise prevail with a little persistence. Second, some taxpayers that file an OIC really possess the ability to pay their tax liability and don\u2019t meet the OIC qualification standards. Their \u201cdissatisfaction\u201d with results is a matter of personal greed in an effort to avoid paying tax they legitimately owe. Lastly, the OIC is most assuredly still a viable solution in many cases to settle a tax problem. A taxpayer should seek competent, professional assistance when considering an OIC. A competent professional will analyze<\/a> the taxpayer\u2019s situation before recommending any solution. If an OIC is appropriate the competent professional will inform the taxpayer that it is likely to be rejected initially and an appeal will be necessary, and therefore patience is essential.<\/p>\n","protected":false},"excerpt":{"rendered":" Most of what you've read online about IRS problems is wrong, or at least misleading. I'm Darrin Mish. I practice tax law in Tampa and I've been doing this for 32 years. Here's what's actually true. On July 23rd the Wall Street Journal online edition published an article about a settlement between a well known […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[592],"tags":[595,144,126],"class_list":["post-16772","post","type-post","status-publish","format-standard","hentry","category-irs-problem","tag-irs-installment-agreements","tag-irs-levy","tag-offer-in-compromise"],"_links":{"self":[{"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/posts\/16772","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/comments?post=16772"}],"version-history":[{"count":4,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/posts\/16772\/revisions"}],"predecessor-version":[{"id":28140,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/posts\/16772\/revisions\/28140"}],"wp:attachment":[{"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/media?parent=16772"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/categories?post=16772"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/tags?post=16772"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}