“Offers in Compromise” (OIC) 3 Types!!!

*Doubt as to Liability (Examination Issue)

*Doubt as to Collectability(Most Common)

*Promote Effective Tax Administration(Special Circumstances)

Pros

• ELIMINATE TAX! It is possible to fully and completely eliminate the taxes you owe – inclusive of penalties and interest.  There is no preset bottom limit that the IRS will accept to settle your debt especially if your offer is planned and Submitted “Correctly!“
• REDUCED TAX DEBT! When planned & submitted correctly, your debt may be settled for MUCH LESS of what you presently owe!
• PROTECTION! You are protected from “Levies” & “Liens” during your “Offer” negotiation.
• CREDIT REPORT, Good!  Your “Credit Report” will not be tarnished or your credit score lowered due to a successful offer!

Cons

• FAILURE! Most often “Offers” are not planned or submitted “Correctly“ and therefore the success rate is low.  Either taxpayers submit them on their own or they hire a National “Offer House” to submit for them.
• HIGH COST! Most tax resolution firms will require a minimum of $3,000.00 and up of your precious money, compose an application and submit to the IRS.  Most of their clients will just be given an “OFFER”. They will NOT:

*Investigate your unique situation…   

*Review all other tax resolutions available to your CASE that will cost you less money and produce better results, or 
*Design a plan that ensures a legitimate chance of qualifying, for an “OFFER.” 

• PROTECTION LIMITED! You are protected from “Levies” & “Liens” only during the negotiation of a failed or rejected “Offer”.
• ASSET SEIZURE, HARRASSMENT! Unprotected!  The IRS will continue to threaten, harass, & seize your Assets if your “OFFER” is unsuccessful. In many cases after you have paid thousands of dollars, to one of the Many Firms & Companies that advertise “Wild Promises” on National TV, radio, through telemarketers & mail, You will be “Ripped Off!”
• RECOURSE? Little to None! You will have little recourse in getting back your thousands of dollars from an “Offer House” if your “OFFER” is rejected or a ridiculous amount is “Countered Offered” by the IRS.
• SUITABILITY Case Design! “Offers” are NOT for everyone and each taxpayer and their tax debt has its own unique characteristics.  Other tax resolutions available to your CASE may produce better yet faster results at a lower cost to you.
• EXTENDED COLLECTION!  Your important “Collection Statute” will be Extended during your offer attempt.

SD&A will Investigate your unique situation, review all other tax resolutions available to your case and determine if an OIC is in your “best interest”, then customize and design a solid plan of action!  We understand the objective is to determine the least amount that the IRS will accept before submitting the offer and preplanning is the essential to achieve this objective. 

Status “53” Currently Non-Collectible (CNC)!

Based on financial Facts & Circumstances

Pros

• ELIMINATE TAX! When “CNC” has been achieved and the “Collection Statute” has expired, your taxes have been totally eliminated with you paying Nothing!
• PAY NOTHING! Achieving “CNC” means you “Pay Nothing” to the IRS!
• COLLECTION STATUTE NOT EXTENDED!  IRS and some State tax debt will disappear when the 10 year “Collection Statute” expires.  “CNC” will NOT extend this important Statute!
• PROTECTION! You are protected from “Levies” & ”Liens” during “CNC.”
• TAX LIENS ELIMINATED! When tax debt has been eliminated by this process, the Tax Lien is no longer valid.

Cons

• DIFFICULT!  Each taxpayer’s “Financial Status” is unique; if destitute it may be easy to obtain, if not it may be impossible to obtain.  A licensed, seasoned professional is essential in obtaining this “Status.”
• PROTECTION LIMITED! “CNC” will normally protect you for 1 year.  The IRS is required to re-evaluate you each year to see if your financial situation has improved, but can re-evaluate at any time.
• SUITABILITY Case Design!  “CNC” may not be the best Strategy for you if your unique situation is subject to change.  We cannot elaborate on this subject since information on this matter is confidential and exclusive to our Firm. Case design is essential to ensure all unique characteristics of the taxpayer and their tax debt has been addressed.  Other tax resolutions available to your CASE may produce a better plan for the total Elimination of your tax debts.
• NOT ALLOWED! Many State Department of Revenue may not have provisions for or recognize “CNC.”

SD&A Will help you preplan to achieve “CNC” if your financial situation allows and we will customize and design a solid plan of action and determine if this Resolution is your best strategy! 

Bankruptcy!  Tax Aspects………Caution!

*Chapter 7– Liquidation with Ch.7 trustee – for Individual or Entity

*Chapter 13– Payment Plan 3-5 yrs., with Ch.13 trustee – for Individual only

*Chapter 11– Payment Plan, Debtor in possession is trustee – for Individual or Entity

 

Pros

• ELIMINATE TAX!  Chapter 7’s can totally eliminate most tax debts within months!  If all special statutes, qualifiers & procedures are met!
• REDUCED TAX DEBT!  Chapter 13’s (payment plans) can reduce tax liabilities to 10% or more of the total liability!
• PAYROLL TAX REDUCED! Bankruptcies can reduce or Eliminate certain parts of Payroll Tax if all special statutes, qualifiers & procedures are met!
• PROTECTION! Bankruptcies will protect you during your bankruptcy!  IRS and State Department of Revenue cannot “Levy” your assets!
• REFUNDS!  Will be sent to you even if you owe the IRS and State Departments of Revenue providing no “Tax Lien” was filed on you prior to your initial bankruptcy filing date.

Cons

• TAX LIENS!  Will normally survive the bankruptcy and removal of the “Tax Lien” normally is not the responsibility or agenda of your bankruptcy attorney!
• ASSET SEIZURE, HARRASSMENT, Unprotected!  Unfortunately many bankruptcies are planned and initiated “Incorrectly”.  They may or may not be the best strategy.  Often, after your officially discharged from your bankruptcy, IRS &/or Dept. of Revenue will attack you since all your past, current and future issues were not addresses prior or during your bankruptcy. Almost always a seasoned“IRS Enrolled Agent” professional advice is“Golden”in this area! 
• PAYROLL TAX Survived! Bankruptcies can reduce or Eliminate certain parts of Payroll Tax if all statutes, qualifiers & procedures are met other parts are Not Dischargeable!
• CREDIT REPORT, Bad! Chapter 7’s will tarnish your “Credit Report” for 10 years.  Chapter 13’s will tarnish your “Credit Report” for 7 years.
• REFUNDS LOST!  “Tax Refunds” will be applied to the past “Tax Lien.”
• SUITABILITY Case Design! “Bankruptcy” is NOT for everyone since each taxpayer and their tax debt has its own unique characteristics.  Other tax resolutions available to your CASE may produce better faster results at a lower cost to you without a tainted “Credit Report”.
• EXTENDED COLLECTION! Your important “Collection Statute” will be Extended during your Bankruptcy!
• PENALTY EXTENDED COLLECTION!  Your important “Collection Statute” could be extended by an additional 6 months time penalty on top of your halted “Collection Statute” in most Bankruptcy cases!

SD&A 

We will customize and design a solid plan of action and if Bankruptcy is suitable for your unique situation we:

*Will work together with your Bankruptcy attorney to plan to ensure all your tax matters are addressed before you file and monitor your case during bankruptcy to ensure all past, current & future taxes are resolved.  Preplanning is the Key! 

 *Will refer Bankruptcy Attorneys to your case for CSRA & its surrounding counties

*Will work to discharge your tax lien after bankruptcy! 

Limitations on Filing Bankruptcy:

*Chapter 7

– Means Test, Tax is not consumer debt-may not apply

– Income less than state median

*Chapter 13

– Debt Limits

– Unsecured <$336,900 (general amounts)
– Secured <$1,010,650 (general amounts)

Dischargeable Tax:

*3 yrs from due date + extensions
*2 yrs after filing late return + (some days/variable)

*240 days after assessment of tax
*No fraud on return or evasion to pay
*No un-assessed tax
*No (TFRP) Trust Fund Tax

Discharge Happens:

*Chapter 7 – Court enters discharge order….Could be as soon as 3 months
*Chapter 13 – After last plan payment…..Unless there is a Hardship
*Chapter 11 – After last plan payment….Unless unsecured’s paid something & request it

Taxes after Bankruptcy:

*Chapter 7 – Non-discharged taxes Must be paid after Bankruptcy

*Chapter 13 & 11 – Secured Tax – Must be paid w/interest or surrender property
*Chapter 13 & 11 – Priority Tax – Must be paid w/interest during plan /5yrs max
*Chapter 13 & 11 – Unsecured Tax – Must be paid in plan from disposable income

(Source, 2010 IRS Forum)

Audits/Amendments! 

(Previous filed Tax Returns)

Pros

• ELIMINATE TAX! The strategy of Audits/Amendments could totally Eliminate your Tax Debts. A Licensed, Seasoned Expert is essential for “Audits.”
• REDUCED TAX DEBT!  Reviews of your previous filed “Tax Returns” could reduce your current tax liability, penalty and interest charged.
• REFUNDS! Reviews of your previous filed “Tax Returns” can possibly produce “Refunds” that will be either applied towards your current tax liabilities, penalties or interest charged, or be sent to you if your Tax Debts are Eliminated.
• PROTECTION!  Levy reprieves can be granted by the IRS for time to collect data and compose amendments for the benefit of the taxpayer in most cases.  “Levies” and “Liens” will not be initiated by the IRS if prior approval is granted by the IRS Collection Agent.
• COLLECTION STATUTE NOT EXTENDED!  IRS and State Departments of Revenue will not extend the “Collection Statute” during the time granted to file an Amendment and reduce or Eliminate the tax liability.

Cons

• None Known

SD&A will “Audit” all previous filed “Tax Returns” for accuracy and completeness.  

*We will demand the IRS grant “Levy” reprieves for our clients during the time allowed collecting information and composing the amendments.  

*We are extremely diligent and are experts in this field!  We have found discrepancies, overlooked facts,  etc. in tax returns composed by even the best of licensed professionals.
Collection Statutes(SOL)

Statute of Limitations, 10 years generally, can be extended: 

*Taxpayer out of US for >6 months
*Taxpayer in Bankruptcy + 6 months
*Anytime levy is precluded

• During OIC Pending
• While offer of IA is pending
• During a timely filed CDP
• While Innocent Spouse request pending

Pros

• ELIMINATE TAX! For every Tax Debt there normally is a “Collection Statute” that expires in “10” years from assessment, if not extended by a poorly planned Bankruptcy, failed “Offer in Compromise” or other activities that extend the “Collection Statute”

Cons

• Some State Department of Revenue’s have “Collection Statutes” that differ IRS characteristics. Some State “Collection Statutes” are renewable without your signature or approval.  Each state has laws mandating their different “Statute” dates.

SD&A will obtain your current and future financial goals customize and design a solid plan of action that will consider all Federal & State issues & objectives to determined if the “Collection Statutes” are essential for your tax relief plan. ***Warning!! Never be persuaded by the innocent appearance of IRS agents that may approach you to “Sign” some sort of documents near your “Collection Statutes” expiration date as there are cases where IRS agents have obtained signatures to “Renew” these important Tax Debts!

 

Installment Agreements (IA)
An agreement between the taxpayer & the IRS for the collection of the amount due in monthly “Installment Payments”

Pros

• REDUCE TAX!  A well organized & well planned 433-A Financial Statement can be utilized to establish a very low monthly payment which will allow you to pay a Fraction of the debt you owe!!
• PROTECTION!  “Installment Agreements” will protect you during your agreement!  IRS and State Department of Revenue cannot “Levy” your assets!

Cons

• HIGH COST! Most often “Installment Agreements” fail when the “Agreement” was not planned or submitted correctly and therefore the monthly amount paid to the IRS is set too high which will place undue hardship on the taxpayer!  Either taxpayers submit them on their own or they hire a National “Offer House” to submit for them and normally receive POOR Results.
• FAILURE! Continuous Tax Debt!  Most often “Installment Agreements” are violated and fail since they are not planned or submitted correctly either by the taxpayer on their own or by a National “Offer House.”  Current and future tax liabilities are not eliminated or paid off.  The filings of current and future tax returns with large unpaid balances due violate the “agreement” and cause a default of the current “Installment Agreement.”

SD&A will customize and design a solid plan of action and preplan your “Installment Agreement” before submission to the IRS! We are extremely diligent and are experts in this field & case design is essential to ensure all unique characteristics of your future goals and tax debt have been addressed. **NOTE: Negotiating a low payment plan is the goal of any Installment Agreement, preplanning is the Key.  

Innocent Spouse Relief!

Pros

• ELIMINATE TAX!  If it has been determined by the IRS that you are a victim of the misdeeds or fraud committed by your spouse or ex-spouse your Tax liability can be totally Eliminated!
• REDUCE TAX! Again if determined by the IRS that you are a victim of the misdeeds or fraud committed by your spouse or ex-spouse your Tax liability can be Reduced to the amount of Tax due by you solely!
• REFUNDS! Again if determined by the IRS that you are a victim of the misdeeds or fraud committed by your spouse or ex-spouse your Tax liability can be Eliminated and it is possible for “Refunds” to be received on the tax overpayment!

Cons

• INCORRECTLY Done!  There are cases where “Innocent Spouse” was filed and negotiated incorrectly and although the taxpayer was not subject to a wage or bank account levy their subsequent Tax Refunds were applied to the Tax Liability created by the mischievous spouse for the entire 10 year “Collection Statute”.

SD&A will customize and design a solid plan of action and preplan your “Innocent Spouse Relief” application before submission to the IRS! We are extremely diligent and are experts in this field. 

*Case design is essential to ensure all unique characteristics of your future goals and ultimate elimination of your tax debts have been addressed.  
Injured Spouse  (Relief) Form 8379

Pros

• TAX AVOIDANCE/REFUNDS!  If determined by the IRS that you are a victim of your spouse’s legally enforceable past-due obligations and you meet the conditions and requirements of form 8379, your portion of any future or current offsets can be avoided or refunded!

Cons

• None known

NOTE: Community Property States may have special rules that will apply to the calculation of an Injured Spouse Refund!

SD&A “Injured Spouse Relief” application can be submitted after a refund has been applied to a outstanding debt through a 1040X process! 

CDP’s & CAP’s (Collection Due Process) & (Collection Appeals Program)

Pros

• Appeals process that “Stops All Collection Action”!  There are two main appeal methods used to appeal IRS collection action by allowing a senior technical advisor within the IRS to review your case.  Each has its own unique helpful application to help control aggressive IRS Collection Action.
• An untimely filed CDP will not halt “Collection Statutes” but can disqualify “Appeal Rights.”

Cons

• There are times where CDP’s & CAP’s may not be the best strategy, depending on the particular circumstances of your case.
• Timely filed CDP’s will halt the “Collection Statute” during the CDP proceedings but will still maintain “Appeal Rights.”

433 Financial Statements!
*Required by the IRS when total amounts owed exceed $25,000
*Can be Utilized by taxpayers that owe less than $25,000 but have little to no monthly disposable income to pay IRS
Pros 

• “Financial Statements” are not required for Tax Liabilities under $25,000.00 but can be used to create a comfortable “Installment Agreement” for taxpayers that have little disposable income monthly, if preplanned correctly!

Cons

• Will show your disposable income and are required by the IRS when your Tax liability exceeds $25,000.00.  SD&A Recommends that you do NOT attempt to submit these to the IRS on your own!  Preplanning prior to submittal is Golden.

Professional Tax Representation!

Pros

• Choosing a professional firm such as “SD&A” will provide the entire expertise & care that you need to procure your case quickly and professionally with every dollar spent working for you!

Cons

• Unfortunately, you will discover that many tax representation firms although listed with the Better Business Bureau or members of the Better Business Bureau may have poor customer service records or very high dissatisfaction levels and therefore have very poor BBB rating. In fact, some high profile companies are prohibited from operating in certain states by state regulators.

Contact Syritsyna-Day & Associates to find out how we can assist you with yourFederal Tax issues, including Georgia tax liens and more. We proudly serve the CSRA, the Tri-Cities of Augusta, Savannah & Columbia. We are licensed to serve taxpayers throughout the United States!