Offer in Compromise
For decades, Charles Krengel, P.A. has been helping clients reach Offer in Compromise agreements with the IRS. Unlike many large tax resolution companies, which make misleading promises to charge exorbitant fees, our established, reputable CPA firm makes the best decisions based on an in-depth understanding of your tax history and financial situation. We handle the entire process to help you settle your tax liabilities in the most beneficial way possible under the law. Continue reading below to learn more about the options available to you, and how we can help.
If you’d like to speak with a Charles Krengel, P.A. representative today, call us at (800) 892-9631 or click here to contact us online!
Won’t The IRS Take Everything?
One of the problems is that most people believe the IRS is resolute when it comes to payment. Once you figure out how much you owe, that’s what you’re paying them, and that’s the end of the discussion.
In truth, how much you owe is often dependent on what you can actually pay. Depending on your situation, you can make what the IRS calls an “offer in compromise,” where you pay less of your tax debt providing you meet certain criteria.
What Is An “Offer In Compromise?”
Essentially, it’s where you request the IRS evaluate your tax burden, your current income and assets, and your overall ability to pay, and accept a settlement less than the overall tax liability. You will need to qualify and the standards are specific, but if you do qualify, you can pay less than the full amount owed. An offer in compromise can be used by individual and business taxpayers.
The IRS will evaluate the RCP or “Reasonable Collection Potential” of the taxpayer, which is their measurement of their ability to pay. They determine the RCP from the value of their hard assets including cars, bank accounts, real property, retirement accounts, investments, furniture and jewelry. The second and often more difficult piece of the RCP is the taxpayer’s ability to pay on a monthly basis which IRS considers to be an asset. The taxpayer’s hard assets and future ability to pay computation are added together to determine the minimum amount to offer. Our expertise in offers allows us to settle your taxes for the lowest possible amount.
Does Everyone Qualify For an Offer in Compromise?
The answer is no! There are three main reasons why offers are rejected:
- The reasonable collection potential exceeds the tax liability.
- The taxpayer can full pay the tax liability thru an installment agreement before the statute of limitations for collections would expire.
- Bad public policy. The IRS can reject your offer even if you have met all their criteria for acceptance. If the IRS determines that the taxpayer has abused the tax system over a long period of time, the offer can be rejected because it would not be in the best interest of the government.
On What Grounds Does the IRS Accept Offers in Compromise?
The IRS will consider Offers in Compromise based upon the following factors:
1. If there is a doubt that the tax debt is collectible, such as when the taxpayer’s assets and income amount to less than the taxes owed, an OIC may be accepted. This is the most popular type of offer.
2. If there is a doubt about liability. If there is a dispute about the existence or correct amount of the tax debt under law, there is potential for an OIC.
3. If there is no doubt about the amount of taxes owed, or that the full amount can be collected, and OIC could still be accepted under effective tax administration if requiring full payment would create an economic hardship, or would be unfair due to exceptional circumstances. This type of offer is often used when a taxpayer has a chronic illness and must use his/her savings to pay for future expenses.
An Offer in Compromise can be submitted with payments due in a lump sum or in installment payments up to 24 months. The offer amount is generally higher on an installment basis but allows more payment flexibility.. Sound intimidating? Don’t worry – you can have peace of mind when you work with Charles, Krengel, P.A. to handle the process.
How Can Charles Krengel, P.A. Help You?
Charles Krengel, P.A. and its team of CPAs and business consultants will handle every step of your Offer in Compromise negotiation. We have decades of experience dealing with the IRS and will represent you at every point of contact. You sign an IRS power-of-attorney, and we’ll handle the rest.
First and most important, we will determine if you qualify for an offer in compromise. We will determine which grounds your OIC eligibility will be based upon, whether it’s doubt as to collectability, doubt as to liability, or effective tax administration. We take an in-depth look at your tax history and finances and make the best decision based on your situation.
Beware Many Tax Resolution Scams
Unfortunately, there are many “tax-settlement companies” out there that make big promises, but offer an ineffective, generalized approach. They will often mislead customers with flashy advertising, promising to reduce their tax bills, usually just to trick people into paying thousands of dollars in advance fees. Read more about this in a recent article in USA Today.
Work with an established, reputable firm that you can trust. Charles Krengel, P.A. has been helping clients with tax problems since 1987. We look at every case in depth, and never promising anything we can’t deliver. We consider ourselves to be your trusted advisors, and we take that relationship very seriously.
If you’d like to speak with a Charles Krengel, P.A. representative today, call us at (800) 892-9631 or click here to contact us online!