Randolph Law Firm, P.C.

IRS Eases Offer-in-Compromise Requirements to Help More Taxpayers

An offer in compromise (OIC) allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship. The IRS considers your unique set of facts and circumstances, such as ability to pay, income, expenses and asset equity. The IRS generally approves an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time.

In 2012 the IRS has expanded a Fresh Start Initiative by offering more flexible terms in the OIC program. You may now be able to resolve your tax liability in as little as two years based on eligibility. The IRS will determine the collection potential based on your assets and income to determine if the liability can be paid in full as a lump sum or through a payment agreement. When calculating the potential, the IRS will now look at only one year of future income for OIC paid in five or fewer months, down from four years, and two years of future income for OIC paid in six to 24 months, down from five years.

When conducting the analysis for your ability to pay, the IRS applies allowable living expense standards that incorporate average expenditures for basic necessities for people in similar geographic areas. The allowance portion of the standards has been expanded to include credit card payments and back fees and charges, which were not considered before. The IRS will now allow payments for student loans for post-high school education, if they are guaranteed by the government. Further, payments for delinquent state and local taxes may be allowed based on a percentage basis of tax owed to the state and the IRS.

At Randolph Law Firm, we understand dealing with the IRS. Attorney Taylor L. Randolph has a Masters in Legal Taxation and is experienced with representing taxpayers before the IRS. If you're worried about your IRS matters, call local Las Vegas Attorney Taylor L. Randolph for a free face-to-face consultation of your legal rights. Call 877-1313.

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