Offer in Compromise | Stop Tax Levy | Flat Fee Tax Service | Florida

An Offer in Compromise is an IRS tax Settlement: The good, the bad, and the ugly.

There are many positives and negatives to deciding whether an Offer in Compromise is the right next-step in resolving your IRS debt.

One thing is for sure:  An Offer in Compromise (a/k/a OIC) is not a one-size-fits-all affair.  There are many factors to think about before attempting to settle with the IRS.

A successful tax settlement can put a smile on your face and have you jumping for joy (the IRS said yes and your tax debts are over!).

Or, like “all things IRS” the IRS, an Offer in Compromise (OIC) can leave you a little frustrated as it requires an understanding of how to navigate though the IRS settlement guidelines that often have no fairness or reason.

What you want, though, is to know what to expect, and to make a fully informed decision about whether the IRS compromise process is right for you.

Here is the good, the bad, and the ugly of an Offer in Compromise:

The Good:

  • An OIC can be as advertised – a fresh start from your IRS debt.
  • No more looking over your shoulder with fear of an IRS seizure of your wages or bank accounts.
  • Improved credit score – after an offer in compromise is complete, the IRS will release all tax liens filed against you.
  • IRS collections are put on hold while the Offer in Compromise is investigated. After acceptance, you will have peace from IRS certified mail letters, visits from IRS Revenue Officers and wondering what’s around the corner.
  • You have put the IRS behind you and can buy a house, a car, and save for retirement.

    The Bad or not so good:
  • The IRS will do a comprehensive investigation of your finances before settling, requiring completion of their Form 433A or 433B to disclose your income, expenses and assets.
  • You will have to tell the IRS where you work and bank, and list your assets, including your house, cars, valuables and retirement accounts.
  • Verification will be required, including an IRS review of your pay-stubs, tax returns, bank statements, business profit and loss, and proof of payment of your monthly bills.
  • While an Offer in Compromise is being reviewed, the IRS timeline to collect from you (10 years), stops running. In that regard, it can be a bad idea to try to settle when only a few years remaining for the IRS to collect.
  • After acceptance, the IRS will put you on a five year probation, requiring full compliance in filing and payment of all taxes.  Not performing to IRS expectations going forward will default the settlement.

    The Ugly (Not all that ugly)
  • An Offer in Compromise is not a quick fix – a settlement offer can take the IRS a minimum of 9-12 months to investigate, with another 6 months if appeal is needed; the IRS then allows 5-24 months to pay the tax settlement.
  • The IRS has guidelines that can impose their will over yours on budgeting matters. Making credit card payments, or have a high monthly mortgage or car loan?  Forget it, the IRS may want that money in their settlement calculations.
  • If the IRS determines they can collect the amount you owe, your settlement offer will be turned down (with appeal rights).
  • The IRS does not have an open door policy on offers.  It is not a handshake deal – the settlement amount is not based on fairness but collectibility of the debt.
  • The IRS most recently rejected 60% of the offers it received, consisting of 41,000 rejections out of 68,000 submissions.

    FLAT FEE TAX RELIEF HAS A 96% OFFER IN COMPROMISE APPROVAL RATE

READ ABOUT SOME OF OUR SETTLEMENT SUCCESS STORIES.

It is easy to be lead to believe how simple it all is.  And make no mistake, an Offer in Compromise can be a wonderful way to rid yourself for good of the IRS.  But like the Clint Eastwood film, you need to know the good, the bad and the ugly to make sure that an OIC is the right move for you.

And keep in mind that there are other tax relief options – a settlement compromise is not the only way to clear the IRS out of your life.  The IRS can agree that you owe the tax debt but not force you to repay it (known as being Currently not Collectible, where the IRS puts you in their bad debt category and leave you alone). The IRS has 10 years to collect taxes – maybe you let the time frame expire (Statute of Limitations) rather than compromising.

I am Dave Rosa. It is my responsibility and my pleasure to provide a thorough, comprehensive and free consultation. Our conversation will take 20 to 30 minutes.

At the end of our conversation, you will have a complete understanding how you tax problem can be relieved.

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How Much Will the IRS Settle For | Flat Fee Tax Service | San Diego

The average amount that the IRS settles for in an offer in compromise is currently $6,629.  Sounds good, does it not? If only an IRS settlement was that easy, every taxpayer would be submitting IRS settlements, right?

The tax professionals at Flat Fee Tax Service provide valuable IRS tax debt help at a very affordable fee. Our teams are located in San Diego, CA and Clearwater, FL.

Offer in Compromise information: In 2014, the IRS received 68,000 Offers in Compromise submissions from taxpayers. The IRS accepted 27,000 of those settlement offers. The IRS accepts approximately 40% of the settlement offers submitted. Our tax professionals expect an explosion of IRS settlement submissions in the coming year due to COVID-19.

FLAT FEE TAX SERVICE CLIENTS HAVE A 96% SUCCESS RATE 

The total amount accepted in all Offers in Compromise in 2014 was $179 million which is an average income tax settlement of $6,629.

The above statistics do not mean that a financially struggling taxpayer will settle with the IRS for that amount, or that there is a 40% chance your IRS settlement offer will be accepted.

The IRS uses a very specific and complicated formula in determining the settlement value of an Offer in Compromise and whether or not to accept or reject it.  Your success depends on how a taxpayer fits into the IRS formula.

The Offer in Compromise program formula works like this:

  1. The IRS will figure out how much they think that a taxpayer can pay them every month in an installment agreement. They do this by asking for your pay stubs or, if you are self-employed, a recent profit and loss statement from your business.
  2. The IRS wants to know about your monthly living expenses.  Some of those expenses such as your housing and utilities, car payment(s) and food/clothing will subject to IRS limitations. The IRS calls these limitations Collection Financial Standards, often referred to as allowable living expenses. The IRS is trying to create more cash flow than the struggling taxpayer will actually have by limiting the expenses to amounts the IRS thinks are reasonable.

The taxpayer’s monthly income, minus the allowable living expenses, equals the taxpayer’s monthly cash flow.  The IRS is going to put a value on the cash flow for purposes of determining the Offer in Compromise settlement value.

If the taxpayer can pay the IRS the offered settlement within five months after acceptance, the IRS values your monthly cash flow by multiplying it by a factor of 12. $200 of monthly cash flow will equate to an offered settlement valuation of $2,400.

If the taxpayer is unable to pay the settlement in full within five months, the IRS will grant you 24 months payment terms. However, your monthly cash flow ($200/month in our example) would be multiplied by a factor of 24, increasing the settlement offer to $4,800. The IRS will give the taxpayer a discount for paying the IRS the offered settlement sooner rather than later.

After determining the value of the settlement offer, the IRS will then turn to a valuation of the taxpayer’s assets, and add that to the value of your cash flow.  How much is your “stuff” worth?  Your car, house, retirement plan?  Subtract any loans to arrive at equity, and in most cases, reduce that by 20% to get to your IRS valuation.

Add your cash flow (multiplied by a factor of 12 or 24) to your asset value, and you have your proposed IRS settlement amount.

The taxpayer’s success with an offer in compromise is based on a full understanding of the IRS investigative process into the income, living expenses and assets of the taxpayer. It is not a one size fits all situation. The amount of one taxpayer’s settlement has no bearing on the success of another taxpayer.  The IRS does not have a set percentage of settlement to the amount owed.  

The taxpayer’s settlement offer depends on convincing the IRS that your financial situation is dismal and that the IRS will never get paid after applying their internal guidelines.

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FLAT FEE TAX SERVICE – FLAT FEE TAX RELIEF:

  1. Guided by our Christian Values is the reason we do not have client complaints.
  2. Accredited by the Better Business Bureau. A Plus Rating. Check our testimonials on the BBB website.
  3. Experienced IRS Income Tax Attorneys work directly with you.
  4. Stop, Remove, Release an IRS wage levy in one (1) day.
  5. 95% of our clients who have submitted an IRS Offer in Compromise has received a successful IRS settlement.
  6. Very Affordable Fees. 10 to 12 months to pay our fees.
  7. Our Clients Receive Positive Results.

“America’s Best & Most Affordable IRS Tax Relief Team”

IRS Wage Garnishment | Los Angeles California | Flat Fee Tax Service

LOS ANGELES – HAVE AN INCOME TAX DEBT?

CALIFORNIA – HAVE AN IRS TAX LEVY PROBLEM?

The tax professionals at Flat Fee Tax Service provide valuable IRS tax debt help at a very affordable fee. Our teams are located in San Diego, CA and Clearwater, FL. It is a routine matter for our tax professionals to have an IRS wage garnishment stopped and released in one day.

If a taxpayer does not take action to remedy back tax problems, the IRS issue a levy order and an employer will be legally obligated to garnish and seize a taxpayer’s paycheck until such time that either the income tax debt is paid off or the struggling taxpayer resolves the tax debt problem in some other way.

Unlike an IRS bank levy, an IRS wage garnishment is continuous. In other words, an IRS income tax wage levy (garnishment) will not be stopped, released and removed by the IRS until such time that the tax debt is satisfied or resolved in some way.

Also, please note that states, like California, will also issue a wage garnishment to collect tax debt. In fact, the State of California Franchise Tax Board has a very proactive and aggressive program to collect any back taxes that the State of California is owed.

IRS Wage Garnishment – Tax Levy

STOP AN IRS WAGE GARNISHMENT IN ONE DAY – 1-866-747-7435

An IRS wage levy (also called garnishment) is the inevitable result of underlying back income tax problems. The purpose and goal of Flat Fee Tax Service, Inc. are to solve a struggling taxpayer’s income tax problem, once and for all. Our team of IRS tax professionals will stop the IRS wage garnishment in one (1) day.

The big picture solution will involve the resolution of the entire income tax problem. After the IRS levy is released, stopped and removed, our client will have a tax debt that still needs to be remedied.

Many taxpayers with an income tax problem, will have unfiled missing tax returns. Our team will make sure to get the taxpayer’s back tax returns are prepared and filed right away so that the taxpayer becomes compliant (rights are restored) with the income tax laws.  Our IRS Tax Attorneys will protect our client’s interests. Our clients will have reached a reasonable payment plan, be placed into Currently not Collectible status with IRS or, better yet, will reduce the income tax debt through an Offer in Compromise (IRS settlement).

If a taxpayer receives an enforcement letter from the IRS or the taxpayer’s employer informs he/she regarding a wage garnishment, it is important that Flat Fee Tax Service, Inc. be contacted immediately. You have a very short time frame (when is the next payday?) to take action to stop, release and remove aggressive IRS collection seizure. The experienced IRS tax professionals at Flat Fee Tax Service will take charge and have the IRS wage garnishment (tax levy) stopped, released and removed in 1 day.

STOP IRS LEVY – IRS WAGE GARNISHMENT IN 1 DAY

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