Negotiating with the IRS: A Few Tips
By Darrin Mish
It doesn't matter how much you owe the IRS; they only need you to pay. As a law, you should determine if the IRS is open to negotiation to arrive at a compromise. The Offer in Compromise comes in in this case. It's not that simple to solve your IRS issues, however.
You should not have any investments, not earn sufficient money to settle your debt, and not possess properties in order to benefit from an Offer in Compromise. You need to be poor for the IRS to grasp that accepting the small amount of money you can offer is more cost effective than going after what little you have.
So how do you decide what you have to offer to pay back when you file your Offer in Compromise to the IRS? What will help you succeed in decreasing your back taxes? You cannot simply guess what amount you have to settle. Also, don't even think about simply choosing to settle a certain fraction of your total debt figure. The IRS will make you calculate how much you are able to pay hypothetically. There are two IRS worksheets, Form 433-A and Form 656, that can let you determine this figure.
The process of negotiation can finally start as soon as you've submitted your offer and the required documentation. If the IRS agents don't like your first offer, they'll send it back with a counter offer which may be somewhat higher, or the full figure. But even if they come back with the full figure, you're not at square one. This is a negotiation, and there are many aspects to every meeting that may assist or hurt you when trying to resolve your IRS issue.
As a benefit, filing an Offer in Compromise will cease all IRS actions against you. All enforcement actions are put on hold until the Offer in Compromise is dismissed or accepted.
You still have other payment options to think about, even if the Offer in Compromise is dismissed. Rather than needing to pay your whole tax debt fully at one time, an installment plan can be negotiated. However, it's still recommended to pay the total figure as soon as possible to prevent the accumulating interest on your back taxes.
Bear in mind that the statute of limitations on your tax debt extends by the amount of time it takes to arrive at a decision from the moment you begin the negotiating process by submitting an Offer in Compromise. The statute of limitations will be extended by a year if the proceedings requires a year for your case to be dismissed.
About the author
Darrin T. Mish (http://www.getirshelp.com) is a Nationally recognized Attorney whose practice focuses on representing clients across the United States with IRS Problems. He is AV rated by Martindale-Hubbel and is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. He has been honored by a listing in Martindale-Hubbel's Bar Register of Preeminent Lawyers. His passion is providing IRS help to taxpayers with both individual and payroll tax problems. He teaches attorneys, CPAs and Enrolled Agents in the finer aspects of IRS representation all around the United States. He can be reached at his website at http://www.getIRShelp.com from http://www.FreeArticlesAndContent.com
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