$186,000 In IRS Tax Debt Resolved With An Offer In Compromise ($21,000 Paid)

SITUATION:

A business in Florida, Supreme Ceilings, was facing a substantial debt of $186,000. Given the significant amount owed and the financial difficulties the business was experiencing, we needed to find a solution to reduce the debt burden.

INVESTIGATION PHASE:

To begin the investigation process, we assigned a dedicated case manager to Supreme Ceilings, ensuring personalized attention to their case. The first step involved creating an online account to help organize a comprehensive financial profile. This profile meticulously documented all income, expenses, assets, and liabilities. We place a strong emphasis on accurately compiling financial profiles because any errors can lead to incorrect or rejected solutions from the IRS.

Our tax professional then requested Supreme Ceilings’ master tax file from the IRS, which provided detailed information on the debt, including the amount owed, tax years involved, penalties, interest, and expiration dates of collection actions. It was confirmed that the business owed a total of $186,000.

Given the urgency of the situation and the substantial debt, we promptly requested a stay of enforcement from the IRS. This temporary hold on collections protected Supreme Ceilings from potential levies or garnishments while we worked on their case.

Next, our tax professional conducted a thorough review of all the financial information, evaluating possibilities for penalty abatements and various resolution options. We compiled an organized investigation report that presented all potential solutions, detailing the pros and cons of each. This report was crucial because it allowed Supreme Ceilings to understand their options and be an active participant in selecting the best resolution. Each solution was considered based on factors such as the business’s future financial outlook and the age of the debt.

We presented a comprehensive report with our findings to Supreme Ceilings, and after careful consideration, it was determined that the best option was to pursue an Offer in Compromise (OIC). This resolution would allow the business to settle their tax debt for less than the full amount owed. Our tax team worked diligently to prepare and submit a compelling OIC package, demonstrating the business’s financial hardship and inability to pay the full debt.

In summary, the investigation phase included:

Detailed Financial Profile Creation: Our case manager worked closely with Supreme Ceilings to gather and organize all necessary financial information and supporting documents.

Power of Attorney and IRS Communication: We obtained a signed power of attorney and requested the business’s master tax file from the IRS.

Stay of Enforcement: We successfully requested a temporary halt to IRS collection actions, providing time to develop an appropriate resolution strategy.

Thorough Analysis: Our tax professional reviewed the IRS-provided information, confirmed the total amount owed, and evaluated the business’s financial hardship.

Resolution Strategy Development: We presented a detailed report with various resolution options and recommended pursuing an Offer in Compromise (OIC).

Throughout the investigation phase, we maintained clear communication with Supreme Ceilings, ensuring they understood each step and were comfortable with the proposed strategies. Our goal was to provide a resolution that alleviated the financial burden and offered a viable path forward for the business.

NEGOTIATION PHASE:

Our team worked diligently to negotiate with the IRS on behalf of Supreme Ceilings. We proposed an Offer in Compromise (OIC) to settle the debt for less than the full amount owed. This involved presenting a thorough financial analysis and demonstrating the business’s inability to pay the full debt.

RESOLUTION PHASE:

After a rigorous negotiation process, the IRS accepted the Offer in Compromise for $21,000. This successful resolution reduced the original debt by $165,000, providing significant financial relief to the business.

Total Amount Owed: $186,000

Settled Amount: $21,000

Savings: $165,000

Resolution: Offer In Compromise

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DISCLAIMER:

This example illustrates a successful debt reduction through an Offer in Compromise under specific circumstances. Results may vary based on individual cases and financial situations. Our team is committed to finding the best possible resolution tailored to each client’s unique needs.