Offer in Compromise Facts and Tips

The Harsh Truth: The IRS wants the entire tax liability paid in full. After all, millions of Americans manage to do this every year, why shouldn’t you? The IRS will evaluate every single detail of your IRS case and situation before they even consider your offer. Here’s what you need to know before your submit an Offer in Compromise to the IRS.

• You don’t qualify: If you have the ability to pay the Tax Debt in full or pay it in monthly payments with an Installment Agreement, you don’t qualify for an Offer in Compromise. Even with special hardship circumstances, like unemployment, most people will not qualify for an Offer in Compromise.

• It’s not the best option: An Offer in Compromise isn’t for everyone. There’s a wide variety of ways to solve your Tax Debt issues, and you need to find the solution best suited to you. Sometimes an Installment Agreement is a better solution; it all depends on your situation.

• It'll cost ya: Depending on which Offer you submit, an application fee of $150 and a percentage of the offer made must be submitted to the IRS. The money you send is nonrefundable! This means you’ll lose big if you’re not approved.

• Your Tax Lien is here to stay: Even if your Offer is approved, your Tax Lien remains until your Tax Debt is paid in full. According to the IRS, you have less incentive to finish paying your debt without the Tax Lien in place.

• Tax Levies are Finders, Keepers: The IRS will keep the proceeds from a levy served prior to submission of an Offer in Compromise. This means the money the IRS seized from your bank account prior to the OIC will not count towards the OIC, and the IRS is keeping it.

• No more refunds: No Tax Refunds will be received until the tax debt is paid in full. The IRS is letting you pay less than you owe, fair is fair, right?

• Collections statutes extended: The statutory period of your debt is suspected while the IRS investigates your Offer, and it’s further extended if you appeal an Offer in Compromise rejection. This will extend the amount of time the IRS has to collect on your tax debt. It’s a good idea to make sure you’ll be approved if you apply, the statute of limitations on your debt can be extended for years.

Ready to Apply? If you think you’re ready to take on the responsibilities of an Offer in Compromise, fill out IRS Form 655 Offer in Compromise. And remember to double check and proofread, the required $150 application fee and 10% of the offer is nonrefundable. A mistake could cost you big bucks.

Extension of Time to File, Step by Step Guide

There's still plenty of time to file your Taxes before the deadline in April, but if you feel like you won't make it in time, it's possible to file for an extension to file your taxes. Here's the step-by-step guide:

Step One: Pull your head out the sand and get to work. There are more colorful ways to state this, but really, stop putting this off!

Step Two: File Form 4868 Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. (Available at IRS.gov)

Step Three: File this form by April 15, 2009. I’d recommend downloading the form and getting this out of the way NOW before your forget to do it later.

There you have it, three steps and it couldn’t be easier. But how do you know if you qualify? As always, I’ve got you covered:

Qualifying for an Extension of Time to File

To get extra time you must:

1. Properly estimate your 2008 tax liability using the information available to you
2. Enter your total tax liability on line 4 of Form 4868, and
3. File Form 4868 by the regular due date of your return.

Word of Caution: I’m not trying to mislead anyone. An Extension of time to File is not an Extension of Time to PAY taxes owed. No matter what, they’re due April 15th. If you do not pay on time you will be charged penalties and interest. Form 4868 does not extend the time to pay taxes.

If You Owe the IRS and you can’t pay by April 15th, I suggest getting in touch with a reputable tax professional or tax resolution company and discussing possible solutions. It’s vital to do this before you wind up with a huge debt on your hands.

Tax Filing Frequently Asked Questions

An IRS-Hitman Special: Tax time is around the corner. This is that special time of the year when my inbox get flooded with questions from worried taxpayers all across the Nation. It's time to give the people what they want, answers to their IRS Tax Filing questions!

What are the legal qualifications for filing jointly?
There's only one. The couple has to be legally married as of December 31 of that year.

Are any special return notations required when your are filing jointly, but your spouse is deceased?
Yes, there's a particular area of the paperwork you need to take note of. In the signature area write in "Filing as Surviving Spouse." The final return needs to have the word "Deceased," the decedent's name, and the date of death written across the top of the return.

What deductions can I safely take?
In the end, it's your decision. But ask yourself the following questions: Do you like taking risks that could land you into prison? Do you like taking risks that would make you pay hundreds or even thousands of dollars in fines? If you wouldn't rob a bank, don't rob the IRS. Those consequences I listed are the realities of getting too bold with your Tax Filing. It's best to get a professionals' opinion on this matter.

I haven't filed my taxes for a couple of years and the IRS says I owe them money. Do I have to file my missing years before the IRS will work with me on my debt?
Yes, you do have to file any Tax Returns from past years before the IRS will work with you. The plus side is that you only have to file missing returns for the last 7 years. And if you file your returns you may see your Tax Debt reduced.

Still Lost? Still have a tax question you need answered desperately? Don't worry, I'll be back next week to answer more of your questions. Until then, I hope everyone has a safe weekend!!

Top Tips for Choosing the Right Tax Preparer

Preparing taxes is a daunting task. And although it feels like they were just filed, it's time to take another look at filing taxes. Small Business owners have a limited amount of time to take advantage of some special deductions this tax year. That’s why many business owners choose to hire a Tax Preparer or Tax Professional to handle their Tax Filing needs. But choosing the wrong Tax Preparer can lead you to owe the IRS or even be the victim of IRS Audits, IRS Liens, or IRS Levies. Make sure you avoid these 3 Red Flags and ask good questions if you don’t want to end up with an Income Tax Problem on your hands.

Red Flags
Steer clear of any Tax Preparer that does the following:

• Your Tax Preparer refuses to answer questions: You don’t want to owe the IRS, don’t let a shifty Tax Preparer get away with evading your questions. You have a right to answers.

• Your Tax Preparer wants a cut of your Tax Refund: This almost guarantees that the Tax Preparer will do anything it takes to increase the amount of your refund, even going against IRS codes and policies. This can result in IRS Liens and Levies being filed against you.

• Your Tax Preparer Guarantees a Tax Refund or IRS Settlement: There are no guarantees with the IRS, especially when it comes to Tax Refunds or IRS Settlements.

Questions to Ask:

These questions are determined by the National Society of Accountants.

• What credentials do you have? You want to work with certified professionals with excellent track records for success.

• How long have you been in practice? Experience is an excellent indicator that you’re working with a trustworthy individual or company. Look for at least 10 years of experience.

• Have you ever dealt with tax situations like mine? You want to work with a Tax Preparer with a ride range of experience. They should know how to handle every IRS Lien, IRS Levy and any other IRS problem in-between.

• Are you the person who will be handling my return? It’s important to know who will be handling your Tax Issues. You need their name and contact information.

• What organizations do you belong to and do they have a code of ethics? You want your Tax Preparer to be a member of organizations like the Better Business Bureau that require companies and individuals to adhere to a strict set of ethics. Look for the highest ratings possible within these organizations.]

Final Tip: You don’t want to owe the IRS or risk an IRS Audit because you chose the wrong Tax Preparer. Remember, if choose the wrong Tax Preparer you can be held liable for all of the damages incurred.

Tax Defense Network Career Fair is Tomorrow!

Tax Defense Network is hosting a Career Fair tomorrow, January 30, 2010. It will be held from 9AM to 1PM. Here's the Scoop:

Contact: Rod DeMontmorency/Erin Bailey
Tax Defense Network
(904)309-8180

In this challenging and competitive job market, Tax Defense Network’s need for qualified employees remains in demand. This company is experiencing a growth level that requires the hiring of 120 more people within the next 90 days. “We are excited to host a career fair in such a soft job market” said Dwayne Harmon, Vice President of Operations for the firm. “As our organization grows so rapidly, our employment and leadership needs have become more urgent, which is great for the community.”

Tax Defense Network extends the invitation to meet directly with their Hiring Team at their in-house Career Fair, Saturday January 30th from 9 a.m. to 1 p.m. We are aggressively recruiting for Sales Consultants, Account Managers, Tax Analysts, Customer Care Representatives, Attorneys, and Management positions. “At Tax Defense Network, we believe that your work should be more than a job. It should be an investment in your future and ours. Right now, we are in need of employees eager to be part of a thriving organization. Our focus is on individuals with the desire and drive to be part of a team dedicated to helping people while evolving within our corporation.” said Rod deMontmorency, Director of Recruiting.

Tax Defense Network continues to be one of the fastest growing companies in Florida, offering excellent compensation plans, extensive benefits, and a progressive work environment. Don’t miss out on your chance to be part of that growth, Saturday January 30th, 9 a.m. to 1 p.m.

For advance consideration, please email your resume to jobs@taxdefensenetwork.com

Tax Defense Network, Inc.
13901 Sutton Park Drive, Suite 220
Jacksonville, FL. 32224
Questions or to reserve a spot, call 904-309-8181
http://www.taxdefensenetwork.com/

Tax Defense Network provides IRS tax relief to individuals and businesses. They make a commitment to provide the highest quality Tax Resolution service in the industry and to provide that service at an affordable price. They have a wide range of products and a competent team that can help our clients. They have been incorporated for over ten years and currently hold an A+ rating with the Better Business Bureau.