The Risks in Submitting Your Own Offer
An Offer in Compromise is prepared and
submitted as instructed in the new 48 page set of instructions and
forms. (You will need the Adobe
Acrobat Reader to view these documents). Supporting documentation must now be supplied with the
original submission.
Based on the submission, the IRS will
determine if the Offer in Compromise is "PROCESSIBLE" If
it is not processible it will be returned to the preparer so
indicated. This does not mean it has been rejected. It only
means that it must be reviewed and corrected to bring it to a processible
state. Processible means it appears on the surface that an offer
might be possible.
IRS personnel will then put your offer in
the hopper for investigation. This means that one day in the future
from 60 days to 5 years later, the IRS will want to discuss, investigate,
negotiate and try to kill your offer. Remember, IRS personnel are
enforcement officers, THEY CANNOT BE YOUR FRIEND.
If the IRS is dealing directly with a
taxpayer, the taxpayer is at the mercy of the particular offer
specialist at the IRS as to whether or not they will give the taxpayer a
break. The taxpayer, being naturally nervous and apprehensive, will
undoubtedly make many mistakes in pushing his own case with the IRS.
Remember, if you say it, or even if the IRS thinks you say it, you are
stuck with it. That is why so much of the communication with the IRS
Offer Specialist MUST BE IN WRITING, CHECKED, DOUBLE CHECKED, AND CHECKED
ONCE MORE. The impact of the answer must be fully understood by the
taxpayer or representative. There are countless tricks and traps to
blow an offer out of the water.
For example, a call comes in from the IRS:
"Just have a few questions to finalize this offer. Say,
did you get a raise last year? How much? Your wife? (Combined
increases of $120 per month on gross W-2 income of $3,600 per month) Wow,
that was a nice increase. Thanks, that's all I need."
Two weeks
later a rejection letter comes from the nice man stating: "Sorry, but we cannot accept your
offer in compromise due to the high probability of future increases in
income."
Ok, you're the taxpayer negotiating your
own offer. What do you do now?
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