Consumer Bankruptcy Journal Summer 2017 - Page 22

Step-by-Step Guide to Filing for IRS Offer in Compromise By Nick Nemeth Law Offices of Nick Nemeth, PLLC Dallas, Texas A ccording to a latest estimate from the IRS, the government loses around $458 billion dollars in unpaid taxes every year. Many delinquent taxpayers who owe the IRS huge amounts in unpaid taxes, whether 22 CONSUMER BANKRUPTCY JOURNAL individuals or corporations, are not always in a sound financial condition. Apart from using tax enforcement efforts such as audits to recover the money, the IRS also helps delinquent taxpayers mitigate financial hardships through programs such as the Offer in Compromise. The  IRS Offer in Compromise is basically an agreement between the taxpayer and IRS to settle outstanding debts in exchange for an amount that is lower than what is owed. Though the program is effective in slashing a significant portion of outstanding debts, taxpayers need to approach the application process correctly to increase their chances of success. The article is a step-by-step guide to filing for an IRS Offer in Compromise. Summer 2017 1. Gather Personal and Financial Information Filing an Offer in Compromise is meant to eliminate outstanding tax debts. The IRS does not accept any random amounts when settling outstanding debts, such as “pennies for dollars”, and assesses a number of factors before they approve or decline an OIC claim. Calculating a reasonable offer amount is therefore, the first step to pacify the IRS into accepting your OIC. For that to happen, you need to gather essential personal and financial details such as investments, available credit, assets, income, gross income, and expense report for the IRS to accurately evaluate your offer. When you calculate the offer amount, keep in mind that college National Association of Consumer Bankruptcy Attorneys