Common Questions

Discharging back income taxes/penalties is one of the most complicated areas of the law. Therefore, if you do not understand the procedure, you are not alone. I am always willing to discuss any question(s) that you may have. I have listed a few of the questions that are often asked in this process.

Why should I file an Offer in Compromise when the IRS is not actively attempting to collect?

This is a very good question. The problem you have is you do not know when the IRS will begin their collection efforts. However, the most important reason is the United States now owes $40 trillion. It is estimated that the amount of unpaid taxes, undeclared income and fraudulent returns equals or exceeds the deficit for each tax year. Donald Trump has significantly reduced the size of the IRS. However, due to the amount of debt, it will be very difficult for future administrations, Republican or Democrat, to continue in this manner. Since the IRS is currently extremely short staffed, if you delay, you will probably be dealing with an agent in the future that can spend more time on your case. Based upon my experience, it is never a good thing when an agent has additional time to review the information you have provided.

Why should I file an offer now?

Most persons are under the mistaken belief that there is a 10-year statute of limitations on unpaid taxes. This is only partially true. If the IRS files another lien before the 10-year statute expires, the lien is good for another 10 years. The 10-year statute prevents them from taking enforced collection action. But if you have real estate, the IRS will be paid from the sale proceeds. Since the interest the IRS charges is based upon the back taxes, penalties and interest, in most cases, this amount will exceed the increase in your assets. Also remember, that if it does not, the interest rate the IRS charges can be easily modified.

Who will represent me?

I will. As a licensed attorney, I can represent any taxpayer in the United States before the IRS. You have my direct line. I answer this phone. You may also receive a phone call from a person on my staff. But these phone calls are generally limited to documentation requests from the IRS.

How much will this cost?

My goal as your lawyer is to prevent unpleasant surprises. That includes my fee. I send out monthly billing statements so you can follow my fee and the progress of the case. The initial retainer is a minimum of $5,000.00. It may be greater depending upon the amount of the arrearage because generally, the greater the arrearage, the more complex the offer will be. I do accept payment plans.

Can you guarantee your results?

Unfortunately, no. However, we will work together on your offer and an offer will not be filed and/or agreed to without your full knowledge and consent. You will also be kept fully informed of the process.

How much will the offer be?

It depends upon your assets and the amount of the arrearage. Most taxpayers significantly overvalue their personal property. Unless you have a Rembrandt hanging in your living room, most taxpayers do not have personal property in excess of $10,000.00 excluding their automobiles, jewelry and real estate. Even if you do, the IRS does not want to take the time to collect all your furniture and household items. Additionally, before the IRS can seize your personal home, they must get approval from the District Director. This has only happened once to one of my clients and they threatened the IRS agents.

My assets greatly exceed the arrearage.

On rare occasions, this does occur. However, the IRS has a procedure in which they will accept significant payment and waive the penalties. Since these penalties may be 25% or more of the tax arrearage, this may be a significant savings.