You know what makes me sick? You know what makes me so mad that I want to just fill my gas tank up with water and call it quits! (I had to borrow the above from one of my favorite sarcastic commentators, Earl Pitts.)
When I hear one more radio commercial promising to get you out of trouble with the IRS… Folks! They are usually just Offer In Compromise (OIC) mills. They charge high fees to fill out the official IRS OIC forms, many are automatically disqualified 6 months later, but the poor, desperate taxpayer doesn’t know they’re being ripped off until it’s too late and now they have bigger troubles with the IRS than they did before.
So, what do you do if you owe the IRS money and you can’t pay it all?
First option: Call them and set up an installment payment arrangement. Whatever you owe, must be paid off in 5 years or less. The IRS will charge a fairly low interest rate and getting approval is pretty much automatic. Just make ALL the payments on time. (Remember Guido the finger breaking debt collector? He’s a nice guy compared to the IRS when you don’t make your promised payments!)
Second option: If you owe too much to pay off in 5 years, then you may qualify for the Offer In Compromise (OIC) route. Basically, the IRS is going to look at all your assets and liabilities. Real Estate, automobiles, bank accounts and other property. They will also look at your current income and future anticipated income. Generally, if you could liquidate your other assets (usually not personal residence or car) and pay all or most of the current IRS debt, and/or your income level gives you the ability to pay the debt off, then you will probably be turned down for the OIC. We like to do a “stress test” for a client before we decide if they have a chance of making it through the OIC process. The goal is to offer a fair amount, that you can afford to pay, for the IRS to accept as full payment for your tax debt. Remember the old saying, “Pigs get fat, hogs get slaughtered.”
Once the OIC forms (along with a filing fee of $205) have been sent to the IRS, you can expect the IRS to take 6 months or longer before they review it and contact you with questions and their determination. During that time, all collection efforts by the IRS are put on hold. If the IRS accepts your “offer” you must pay it right away and have no further delinquencies as well as fully complying with all tax laws from now on. In other words, it’s time to become a model taxpaying citizen from here on out.
Third Option: Attempt to get the IRS to drop penalties and interest leaving a small tax debt that you could pay off via the installment arrangement or just paying the entire balance. (You could get a second mortgage on your home, or some other borrowing from another source if you don’t have the cash.) You would be surprised to find out there are some friendly humans at the IRS who are willing to listen to your “story.” I had one client whose wife died in his arms after a car accident. The IRS has forgiven some of the interest and penalties and is currently reviewing to possibly forgive the rest. Potential savings to the taxpayer of over $170,000.
These are the big three. If you are in trouble with the IRS, please seek out a CPA or Tax Attorney who can help you, don’t go to those radio advertised OIC Mills!
Did you hear? Prov 17:4 says, “An evildoer listens to wicked lips, and a liar give ear to a mischievous tongue.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com Also on Facebook.
-->You know what makes me sick? You know what makes me so mad that I want to just fill my gas tank up with water and call it quits! (I had to borrow the above from one of my favorite sarcastic commentators, Earl Pitts.)
When I hear one more radio commercial promising to get you out of trouble with the IRS… Folks! They are usually just Offer In Compromise (OIC) mills. They charge high fees to fill out the official IRS OIC forms, many are automatically disqualified 6 months later, but the poor, desperate taxpayer doesn’t know they’re being ripped off until it’s too late and now they have bigger troubles with the IRS than they did before.
So, what do you do if you owe the IRS money and you can’t pay it all?
First option: Call them and set up an installment payment arrangement. Whatever you owe, must be paid off in 5 years or less. The IRS will charge a fairly low interest rate and getting approval is pretty much automatic. Just make ALL the payments on time. (Remember Guido the finger breaking debt collector? He’s a nice guy compared to the IRS when you don’t make your promised payments!)
Second option: If you owe too much to pay off in 5 years, then you may qualify for the Offer In Compromise (OIC) route. Basically, the IRS is going to look at all your assets and liabilities. Real Estate, automobiles, bank accounts and other property. They will also look at your current income and future anticipated income. Generally, if you could liquidate your other assets (usually not personal residence or car) and pay all or most of the current IRS debt, and/or your income level gives you the ability to pay the debt off, then you will probably be turned down for the OIC. We like to do a “stress test” for a client before we decide if they have a chance of making it through the OIC process. The goal is to offer a fair amount, that you can afford to pay, for the IRS to accept as full payment for your tax debt. Remember the old saying, “Pigs get fat, hogs get slaughtered.”
Once the OIC forms (along with a filing fee of $205) have been sent to the IRS, you can expect the IRS to take 6 months or longer before they review it and contact you with questions and their determination. During that time, all collection efforts by the IRS are put on hold. If the IRS accepts your “offer” you must pay it right away and have no further delinquencies as well as fully complying with all tax laws from now on. In other words, it’s time to become a model taxpaying citizen from here on out.
Third Option: Attempt to get the IRS to drop penalties and interest leaving a small tax debt that you could pay off via the installment arrangement or just paying the entire balance. (You could get a second mortgage on your home, or some other borrowing from another source if you don’t have the cash.) You would be surprised to find out there are some friendly humans at the IRS who are willing to listen to your “story.” I had one client whose wife died in his arms after a car accident. The IRS has forgiven some of the interest and penalties and is currently reviewing to possibly forgive the rest. Potential savings to the taxpayer of over $170,000.
These are the big three. If you are in trouble with the IRS, please seek out a CPA or Tax Attorney who can help you, don’t go to those radio advertised OIC Mills!
Did you hear? Prov 17:4 says, “An evildoer listens to wicked lips, and a liar give ear to a mischievous tongue.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com Also on Facebook.