Our Columbus tax attorneys routinely provide guidance to taxpayers and businesses regarding how to utilize the Internal Revenue Service’s collection alternatives to manage their federal tax liabilities. If an individual taxpayer or a business is contacted by an IRS Revenue Officer, it is extremely important to be aware of, and fully understand, the various collection alternatives that are available to settle federal tax liabilities.
There are instances where paying the tax liability in full is not an option for the taxpayer. In this instance, there are various collection alternatives available to taxpayers and businesses that will help reduce, or completely eliminate, tax liabilities that arise as the result of, among other things, an IRS audit or examination. These collection alternatives include, but are not limited to: (i) offer-in-compromise, (ii) installment agreements, (iii) currently-not-collectible status, (iv) discharging taxes in bankruptcy, and (v) challenging the underlying tax liability. As part of the collection process and working with the IRS, there are times when we obtain new information that is helpful to taxpayers and tax professionals in determining which collection alternative may be the most viable option for a particular taxpayer. This short blurb discusses that information.
How long does an Offer-in-Compromise take to Process?
As we learned and confirmed, the current administration’s failure to fund the Internal Revenue Service to the levels necessary to operate effectively and efficiently continues to have a negative impact on taxpayers as well as tax professionals. We recently spoke with the Internal Revenue Service regarding an offer-in-compromise that we were handling for a client. We are now being told that offers that were submitted in January/February 2015 have just recently been given attention and assigned to an offer specialist. That is over a year since they were submitted. This is a significant hardship for taxpayers. And to be clear, we do not point fingers at the Internal Revenue Service or in any way blame the Internal Revenue Service for the lack of timeliness or the hardship. Rather, we blame the current president and his administration for its continued failure to properly fund the one revenue source that the government has, taxes.
As we have been told by the IRS, offers-in-compromise that are below $100,000 are getting worked more quickly and likely will be worked within six to nine months of submission. But, for offers-in-compromise that exceed $100,000, it is very likely that those will not be worked until nine months or later after that offer-in-compromise is submitted. Thus, we have numerous offers-in-compromise that are out there that have not even been assigned to an offer specialist, and will not be for some time.
Is an Offer-in-Compromise right for you?
In many instances, an offer-in-compromise is an excellent resolution to your federal tax liabilities when confronted by an IRS Revenue Officer. But, it is very important to be aware of what to expect throughout every step in the offer-in-compromise process. The tax attorneys in Columbus, Ohio regularly represent individuals and businesses in a variety of federal tax matters, including the collection alternatives described in this article. If you or your business have been contacted by an IRS Revenue Officer, or you are struggling with federal tax liabilities, we encourage you to contact one of our tax attorneys today. We have vast experience representing clients before the Internal Revenue Service, and we would be happy to thoroughly review your case to determine what options and alternatives are available to you.