How to Settle with the IRS for Pennies on the Dollar: Nicole Ofstein and Arnold Goldstein
Do you wake up at night wondering when the doorbell will ring or someone will try and break it down? Do you own a business and are worried you are about to lose everything because you forget or neglected to do something we are all required to do: PAY YOUR TAXES! What were you thinking? Your fears are not unfounded but there are ways to remedy the situation before you wind up as a guest of the state. Within the pages of this book, now don’t be afraid to read it, you might find a viable solution such as the IRS Offer In Compromise Program which encourages people like you who did not pay their taxes and like a child who cuts school is delinquent to settle their back taxes for pennies on the dollar.
Can this program or OIC work for you. If you cannot pay in full under the Installment agreement and if you can try and convince the IRS that your offer to settle for back taxes is more than they will get if they take all of your assets, plus what you can reasonably afford to pay over the next two years under the Installment plan. But, don’t be fooled you cannot bargain with the IRS but the OIC is a sort of bargaining program and a long process to get through before all is said and done but it will help you if you follow what these authors have created as a guideline your first good nights sleep.
Chapter one focuses on DO YOU OWE THE IRS beginning with how they track you. Imagine a powerful computer linked to 50 state computers as well to Social Security and every other federal agency that ever came in contact with you. You are not only tracked with all of these but let’s not forget Motor Vehicles, unemployment or even public welfare agencies. You see! You can’t escape detection. The chapter continues with a word to non-filers and an alert: What the IRS Knows About You: Should you wise up and decide to contact them here are just some questions you will be asked: Immediate or partial payment, immediate filing of all delinquent returns, reasons for your tax delinquency and filing of current returns and estimated tax payments through them so they can monitor your compliance. They will also want copies of any federal tax deposits receipts or electronic federal tax payment acknowledgement numbers for this same purpose.
Understand that if you cannot pay in full the IRS may request that you complete a financial statement, IRS Form 433-F, Collection Information Earners and Self-employed Individuals or Form 433 B, Collection personal information, including your assets and income. WHY? They intend to find out and uncover property wages available to the IRS for levy and seizure if you are not cooperative, or to give the IRS the information it needs to work out an installment plan or temporarily delay collection if you cannot immediately pay, or to determine if you may qualify for an Offer in Compromise. The chapter continues with more information that they want to ask including that you need to be aware of the Privacy Act of 1974. This Act states that when the IRS requests information they have to inform you the taxpayer of its legal right to ask for this information, why they are asking for it and how it will be used, what will happen if you do not give it to them and whether you have to respond under the law. They continue to explain what happens if you refuse to pay or refuse the information but they have their ways of finding out about your financial status from your past tax returns or : wages and other sources of income, self-employment income, interest and dividend income, capital gains and losses and itemized deductions, such as mortgage interest, rental or other investment income. So, what happens if you decide no way and ignore the IRS? Read page 7 and page 8 to find out and you will definitely rethink ignoring them.
The authors explain how to avoid a tax lien and five ways to delay the tax collector followed by five ways but read them carefully as they continue with How to get rid of a filed notice of federal tax lien. Scary but true the collection power of an IRS levy which is not a lien. It is defined as a legal claim against your property; it give the IRS the authors state the ability to levy, seize, and sell all real or personal property held by third parties when you do not pay your taxes. When a lien is security for a tax debt, they continue a levy seizes and actually takes property to partially fully satisfy the tax which can be used to seize : Wages, salary, state income refunds and securities and much more listed on page 13. There is much more information about tax levies and seven possible ways you can recover your seized property. Read pages 20- 27 carefully to learn the ten deadly taxpayer mistakes such as putting up with an unreasonable or incompetent revenue officer or not knowing where you stand. Don’t admit to violating a tax law and do not ignore the IRS. But, like all mysteries you need to uncover the rest for yourself. The constitution has a bill of rights well so do you as a taxpayer read it to understand your rights on page 27. Chapter 2 focuses on how to legally protect your assets from the IRS and chapter 3 Alternatives to the Offer of Compromise such as abatement, installment agreement, currently not collective, bankruptcy and innocent spouse relief. The Offer in Compromise program in a nutshell is described and discussed in Chapter four followed by Planning your offer in Chapter Five.
After planning your offer and getting all of the information and documents in place there is a process for submitting your offer as explained in Chapter six. It begins with explaining why OIC will be deemed not processable if you are missing one or more of the documents listed on pages 105 and 106. Assembling your documents to your OIC package will vary depending on whether your OIC is based on Doubt as to Collectionibility, Doubt as to Liability, or Effective Tax Administration. You need to start by carefully assembling all your financial records, unless your offer is based on Doubt as to Liability and do not guess or estimate amounts. Reconstruct your assets, liabilities, income and expenses from bank statements, cancelled checks, deposits, credit card vouchers, rental contracts, leases, receipts, court orders, and other records. There are many more steps to follow within this chapter. Do not enlist the IRS to prepare your offer but they give up 17 steps for completing it. Read them and follow them to the letter. Read what you sign and understand the forms they are not hard to complete. Submit the application fee with your offer and submit a down payment with the offer too. The remainder of the chapter explains how they will process your offer and processing doubt as to collectability offers. Chapter seven explains something you hope never happens and that is what happens if the IRS returns and rejects your offer in compromise. Pages 134 and 135 list the reasons why and then why the IRS may reject your offer in compromise in more detail. How to withdraw your case and how to appeal it close the chapter. You have everything in order so let’s read chapter 8 and find out just the opposite of 7 what happens when they accept your offer. What happens when the IRS accepts your offer what is next? If they accept your original OIC or Amended OIC you will then receive an OIC acceptance letter along with from 656 or 656-1 and any collateral agreements, If so, congrats, your tax troubles are not behind you and you do not have to hide under the bed, fear going out of your home or worry about living in a box when all that you own has been taken away. You will receive an acceptance letter, carefully review it and the attachments. Be sure, make sure the documents you received correctly indicate the tax liabilities and amount agreed on and include proper signature by an IRS delegated official. Before you get this letter they will prepare a letter of Acceptance Report or form 7249. At a minimum this report should include the list stated on page 145. They complete the book by discussing what happens if you default of OIC, Will the IRS Adjust, compromise, or cancel the balance due on your OIC, When can the IRS Cancel the agreement and don’t forget to keep and record records of your payments and how to get your tax lien released is also explained. All important how to restore your credit and staying out of trouble with the IRS. Chapter nine shares examples of accepted offers in compromise which will help your to prepare yours if you follow the format as a template for your own. Be aware that there are OIC promoters who may inappropriately advice you they can settle your tax debt for pennies on the dollar through the OIC program even when you clearly do not meet OIC requirements. Stated once again by the IRS Commissioner, they warn you, the taxpayer to watch out for unscrupulous promoters charging huge sums and fees to taxpayers who have no change of meeting the program’s requirements. Be smart, and be aware and don’t get duped. There is a number at the bottom of page 170 to report anyone promoters using the OIC program inappropriately. The book closes with Frequently Asked Questions. As a bonus they include all of the forms you will need to apply for an OIC compromise and more. This is a great resource for anyone even those of us that are never late paying our taxes it explains why we will continue to do so in the future.
Fran Lewis: Just reviews/MJ magazine