The National Law Journal has a great article titled Attorneys Angered Over Lack of IRS Aid which tells about the IRS’s failure to efficiently and properly evaluate and process Offers in Compromise and Partial Payment Installment Plans:
At the start of the new year, the Internal Revenue Service announced steps to help struggling taxpayers buffeted by the deepening recession. But two of its most effective tools have become virtually “dead letter” programs because of agency roadblocks that too few taxpayers can navigate.
Tax practitioners across the country voiced long-simmering anger and frustration with the agency’s handling of the so-called offer in compromise (OIC) and the partial-payment installment program even as these lawyers experience an increasing number of taxpayers seeking their help because of job losses or home mortgage problems. And their frustrations are backed by data from the national taxpayer advocate.
Here’s what one tax attorney who was interviewed for the article said,
It’s extremely difficult to get the IRS to accept an offer in compromise, and it’s especially true if you have somebody who is a middle-class taxpayer here in California making $100,000 to $150,000 a year. What we find is [that] IRS offer specialists and settlement officers seem to be going out of their way to turn down offers.
This view is corroborated by none other than National Taxpayer Advocate Nina Olson who told the Journal,
I personally believe the IRS is not in the business of accepting offers. They have not made any of the changes I first recommended in 2002, and we need to see change.
While we agree that it is difficult to get the IRS to accept a valid Offer in Compromise, we still find that if the Offer is legitimate and properly presented, it will be accepted.
An IRS settlement offer must be well-organized and thoroughly prepared.
If you are serious about making the IRS an offer, you should seek the assistance of an experienced tax professional.
10 responses so far ↓
1 Taxpayer_Owner // Mar 21, 2009 at 7:05 pm
Sure Ms. Olson has talked about the IRS’s shortcomings, ruffled a few feathers, and wrote some tough reports. Unfortunately, Ms. Olson has not been able to get very much accomplished in her seven years on the job other then create a high employee turnover rate. She tried to simplify the tax code by creating a standard definition of a child. When all was said and done, she only made matters worse. So much worse, the law had to be amended.
Ms. Olson also destroyed the very program in the IRS that was set up to assist taxpayers. Before Ms. Olson, if you needed help with a tax problem that was not dealt with satisfactorily through normal channels the IRS would transfer your case over to a group that had the experience in your particular issue and the authority to fix your problem on the spot. Ms. Olson has forsaken this logic. Now if you need help and your case is transferred over to her program it will most likely be assigned to someone that is not experienced or even properly trained to assist you. Moreover, even if the employee understands your situation they will not be able to fix it. They will have to turn around and request the IRS to fix it. Not only is this a poor way to assist taxpayers it also costs taxpayers more money.
The Taxpayer Advocate’s office has an important role of advocating for all taxpayers. While Ms. Olson does an adequate job of this, she does not advocate very well for the individual taxpayer who comes into her office for assistance. For that reason, her employees that work with taxpayers should be reassigned back to the IRS where they will be better trained and better able to quickly assist taxpayers in their moment of need.
2 Peter // Mar 21, 2009 at 7:25 pm
Taxpayer Owner,
I agree with much of what you say.
However, compared to all previous advocate programs, Nina Olson’s is by far the most helpful.
I think she is serious about trying to reform the IRS.
That, at least, is progress.
Everyone at the IRS, not just taxpayer advocate employees, needs more and better training.
3 IRS Needs to Fix Penalty Regime, GAO Report Says // Jul 11, 2009 at 8:56 am
[...] We have seen, for example, similar inconsistencies with regard to the IRS’s Offer-in-Compromise program. [...]
4 Sheri // Sep 28, 2009 at 1:02 am
There is so much online about how the IRS offer-in-compromise program is broken. Can we hear from some people who have SUCCEEDED, whose offers were accepted and how this unfolded?
Thank you.
5 IRS Bait and Switch? // May 6, 2010 at 9:09 am
[...] [...]
6 Taxmasters, Inc. (Chubby Red-Bearded Guy on T.V.) Sued for Deceptive Trade Practices // May 15, 2010 at 9:00 am
[...] Is IRS Offer in Compromise Program a Sham? [...]
7 Rick // Jun 6, 2011 at 8:49 am
I owed 48000 and my offer in compermise was accepted, so now I only owe 2200.00 and I have 24 months to pay that off. What it comes down to is you have to have the right lawyer. I searched for about a month when I found the one I used. They cost me 2100.00 ,. so at the end of the day I only payed 4300.00 instead of 48000.00. You have to have your things in order and be prepaired to give them the info they ask for when they need it. It does work.
8 Peter // Jun 6, 2011 at 8:59 am
Rick,
Congratulations and thanks for visiting.
The right representative is important, but even more important is your current financial status. If you have enough equity in assets to pay the debt in full, Clarence Darrow reincarnate couldn’t get your offer approved.
9 IRS Bait and Switch in Voluntary Disclosure Program // Jul 2, 2011 at 7:00 am
[...] [...]
10 Eddie // Aug 1, 2011 at 6:26 pm
Hi, just wondering if Rick might be able to part with the Atty. Name so I can run my case by him, Tax Masters has ripped me off and won’t return my refund.
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