Tax debt of $29,340.61 resolved with a Offer in Compromise

SITUATION:

A lady who is self-employed reached out to us because the IRS placed a levy on her bank account. The IRS took the little money she had in her savings account. She was urgently seeking help as this money was used to pay her personal living expenses. She was aware that she owed the IRS over 20K for several years, but she just didn’t know what to do since she was not able to pay off the debt back. An investigation and a levy defense were necessary to stop the levy and confirm the amount she owed, the years, the reasons that caused her to owe back taxes, and to identify a complete solution in place for all her tax issues.

INVESTIGATION PHASE:

We proceeded with the investigation phase showing urgency, and submitted a signed power of attorney to the IRS right away to work on the levy defense. While that was taking place we gathered all of the clients financial information by completing the 433A form and contacting the IRS. As part of the process, our tax professional requested her master file and organized how much she owed, for what years, penalties, interest, expiration dates of collection and more. It was determined that she was in compliance with all her tax returns and owed a total of $29,340.61 for 2008-2019. This amount was due because she was not aware she had to make estimated tax payments for her self-employment income.

We requested a stay of enforcement which is a temporary hold for collections to protect her from another levy or garnishment being filed while we worked on her case.

After our tax professional reviewed all her financial information, possibilities of penalty abatement, and different resolutions, an organized investigation report presenting all the options as well as recommended solutions was presented. This is very important because we want clients to know the pros and cons of the various options so that they are part of the solution. Each resolution has different pros and cons and is appropriate based on a variety of factors including a client’s future financial outlook, age of debt, and more. We also include what the client needs to do to stay in compliance with the resolution and how to avoid owing in the future. In this case she had to pay her estimated tax payments for each quarter!

Her business was not doing well as her expenses exceeded her income each month, so it was determined that she qualified for an offer in compromise to settle her debt with the IRS for less than the amount she owed.

RESOLUTION PHASE:

The customer decided to move forward with our recommendation. We started to gather information such as recent bank statements, proof of income, proof of expenses, etc.. An explanation of the circumstances letter was also provided. We put together the Offer In Compromise package and mailed out to the IRS. The proposed offer was for the amount of $2,200. The IRS proceeded to confirm the receival of the documents and all collection action was stopped until the case was reviewed, the bank levy was successfully removed.

An IRS examiner was assigned to the case and after several months the examiner denied the amount of $2,200 and came back with a counter of $4,900. The customer was extremely happy with the response and decided to accept the new offer amount. The option of making monthly payments was provided to her. Out of her $29,340.61 debt she only paid back $4,900 in 5 payments. This resolution has changed the customer’s life as she no longer will be stressing over the IRS debt. She is very grateful for the service provided and the results!

OIC was applied for and accepted with the IRS as follows:

Total amount owed: $29,340.61
Resolution: Offer In Compromise
Payment: 5 Payments of $980.00
Phases worked: Investigation and Resolution

More Tax Debt Relief Issues & Solutions.

DISCLAIMER:

This example is an actual example of a client who enrolled in the tax program. Every case is unique and this is not an extension that you will receive the same resolution as they will. Your situation is unique, as are all tax cases. The team has extensive experience, has former IRS employees, special officers, enrolled agents, tax attorneys, and CPAs. Our tax team will work diligently with a flat fee to solve the tax issue you have for the best possible resolution for you. That means doing all possible to ensure you pay the lowest amount of taxes legally required based on your situation, allowable deductions, finances, and other factors.

Back to top