A client called in as she received an unexpected tax bill with total liability of about $12,000. The IRS notice was for 2017 and she was seeking immediate help to get this resolved. The client also explained how things were very difficult for her after her husband passing away. His death made things very difficult for her financially as her income was very low compared to the expenses she had. The client told us she was very worried because she didn’t have the ability to pay the IRS.
Our tax team started to work on her investigation immediately. The client’s account was in the collections department, therefore a stay of enforcement was not required. During the investigation our tax team confirmed that the amount of taxes owed, including penalties and interest was $12,083.19. This balance was a result of not enough withholdings for 2017. The IRS assessed this tax year later in 2018 so the statute of limitation (balance expiration date) is until 2028. Although the IRS had not filed any levies or liens at that time they still had plenty of time to do so. After further investigation we also confirmed that this client had no missing tax returns to file. This was a good thing as we could move forward and continue with the investigation. We reviewed the client’s current financial situation and learned that his expenses where more than his income.
Since the client did not have sufficient funds to pay the IRS this made him a good candidate for a Currently Not Collectible status. A Currently Non Collectible status means that the IRS would place a hold on collection activity as long as she remained in that financial profile. This would be a temporary resolution that was necessary for the client not to pay anything at that moment. The Currently Non Collectible application was submitted to the IRS and quickly approved. This also gave us plenty of time to move forward and find a permanent resolution to resolve the tax debt once and for all.
After using the client’s current financial situation our tax professional suggested that we submit an Offer In Compromise on client’s behalf. This meant that the client would pay a small portion of the total balance. Our tax team collected all documents such as proof of income, personal expenses, utility bills, bank statements. These were sent to the IRS along with the Offer In Compromise submission. The Offer In Compromise was accepted to settle the debt from $12,083.19 to only $1,444.00. The client made a first payment of $305 and the balance of $1,139 was paid in full 30 days later. Client’s tax issue was successfully resolved.
OIC was set in place with the IRS as follows:
Total amount owed: $12,083.19
Resolution: Offer In Compromise
Payment amount to the IRS: $1,444
Phases worked: Investigation and Resolution
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DISCLAIMER:
This example is an actual example of a client who enrolled in the tax program. Every case is unique and this is not an extension that you will receive the same resolution as they will. Your situation is unique, as are all tax cases. The team has extensive experience, has former IRS employees, special officers, enrolled agents, tax attorney, and CPA’s. Our tax team will work diligently with a flat fee to solve the tax issue you have for the best possible resolution for you. That means doing all possible to ensure you pay the lowest amount of taxes legally required based on your situation, allowable deductions, finances, and other factors.