@Revelate wrote:
@masscredit wrote:
@Revelate wrote:OIC's are such a pita
.
Is it really that bad? I was looking at the IRS site about it the other night. They made it seem like a fairly easy process.
It's easy to make an OIC; however, getting one that they actually will accept is often much harder.
A lot of the "pennies on the dollar" one hears about are somewhat exceptional cases where people don't have sufficient income or the IRS doesn't have sufficient time to collect the debt or if one can prove some sort of hardship IIRC; however, from the research I did (and it's an ugly sheet to fill out) a "proper" one is basically surrender your liquid assets, and then add up your monthly reasonable expenses (and don't estimate low there, the IRS will take what is offered, go figure) over I think 5 years or whatever the remaining period is on your tax debt (10 years from your assessment date, assessment date has to be within 3 years of your filing, or they may do a substitute filing for you if you no-filed and assess that), and subtract that from you monthly income to figure what the IRS could reasonably expect to get from you. That's the math they'll do.
Actually come to think of it, the worksheet I saw looked supiciously like a Chapter 13 worksheet, basically it's the same calculation.
There's actually a very good NOLO book on dealing with the IRS which is worth a read if you're trying to resolve an old tax issue on your own, or if it's a substantial debt, may be worth talking to a tax attorney or tax resolution company.
Thanks for the info! Currently, my weekly/monthly income pretty much covers my monthly expenses. Some months it's a little more and some month's it's a little less. No assets like cars that are paid off, houses, boats, jet skis ect, ect.. All of that stuff went bye-bye a few years ago. Now it's a simple, less stressful life with some tax bills hanging over me. I'd love to be able to pay them off and be done with them if I had the money but I don't. And given the amounts, it's never going to happen. I used this the other night -
Offer In Compromise Pre-Qualifier - http://irs.treasury.gov/oic_pre_qualifier/faces/OIC_Screen4_IntroQuestions.jsp
After plugging in the numbers, it came out to something like $5. per month. I think it was for 24 months.
One of the state dept of revenue people called about my past personal taxes today. Seems like they are all contacting me around the same time now. I spoke with her, explained the situation and she questioned me being able to pay my credit cards but not them. I explained that most of the payments that she sees are to cover my monthly expenses. I pay on the cards then use them for my expenses. It's a cycle that keeps on going. So she told me that they come first (in a nice way) and me paying on my cards like that doesn't look good. She told me that they also have an OIC program. So I'm going to look into that too.
@masscredit wrote:
If I was home and answered the door, I would have taken the letter and card and that's as far as it would have went. We can have a conversation later but not in my home.
I was only home one time when they stopped by. I live in a gated community (with actual human guards). They don't let anyone in without ID and approval with certain exceptions. IRS agents are one of them.
The IRS had filed returns in lieu for several years, had finalized them, and was billing me for seriously large amounts of money which I had ignored. They had started to threaten to sell my home. I had just finished the process of collecting and filing old returns but it involved a major amount of work for nearly a month. At the time the IRS collections agent stopped by I had just mailed it off, along with a request for re-opening the older returns the IRS had filed in lieu.
Since I had also read and was conversent with IRS collection processes the visit was not completely unexpected. I invited the agent in. Explained what I had done, and made copies of several of the returns I had already mailed off.
Exactly as expected from the IRS, all collection activity was frozen while they reviewed the returns. I heard nothing from them until about 4 months later when I got a very fat check since they actually owed me money. I had just been flaky filing because the complexity overwhelmed me and I just put it off.
I was never audited though I had expected to be.
@masscredit wrote:
@Revelate wrote:
@masscredit wrote:
@Revelate wrote:OIC's are such a pita
Is it really that bad? I was looking at the IRS site about it the other night. They made it seem like a fairly easy process.
It's easy to make an OIC; however, getting one that they actually will accept is often much harder.
A lot of the "pennies on the dollar" one hears about are somewhat exceptional cases where people don't have sufficient income or the IRS doesn't have sufficient time to collect the debt or if one can prove some sort of hardship IIRC; however, from the research I did (and it's an ugly sheet to fill out) a "proper" one is basically surrender your liquid assets, and then add up your monthly reasonable expenses (and don't estimate low there, the IRS will take what is offered, go figure) over I think 5 years or whatever the remaining period is on your tax debt (10 years from your assessment date, assessment date has to be within 3 years of your filing, or they may do a substitute filing for you if you no-filed and assess that), and subtract that from you monthly income to figure what the IRS could reasonably expect to get from you. That's the math they'll do.
Actually come to think of it, the worksheet I saw looked supiciously like a Chapter 13 worksheet, basically it's the same calculation.
There's actually a very good NOLO book on dealing with the IRS which is worth a read if you're trying to resolve an old tax issue on your own, or if it's a substantial debt, may be worth talking to a tax attorney or tax resolution company.
Thanks for the info! Currently, my weekly/monthly income pretty much covers my monthly expenses. Some months it's a little more and some month's it's a little less. No assets like cars that are paid off, houses, boats, jet skis ect, ect.. All of that stuff went bye-bye a few years ago. Now it's a simple, less stressful life with some tax bills hanging over me. I'd love to be able to pay them off and be done with them if I had the money but I don't. And given the amounts, it's never going to happen. I used this the other night -
Offer In Compromise Pre-Qualifier - http://irs.treasury.gov/oic_pre_qualifier/faces/OIC_Screen4_IntroQuestions.jsp
After plugging in the numbers, it came out to something like $5. per month. I think it was for 24 months.
One of the state dept of revenue people called about my past personal taxes today. Seems like they are all contacting me around the same time now. I spoke with her, explained the situation and she questioned me being able to pay my credit cards but not them. I explained that most of the payments that she sees are to cover my monthly expenses. I pay on the cards then use them for my expenses. It's a cycle that keeps on going. So she told me that they come first (in a nice way) and me paying on my cards like that doesn't look good. She told me that they also have an OIC program. So I'm going to look into that too.
If you're in a limited finances situation currently, absolutely go down the OIC route.
Sadly the State tax boards and the IRS are completely seperate; any creditor is going to tell you they come first in the collection process but that's not necessarily the case. Anyway my non-professional recommendation, make sure you account for *both* the IRS and the State in your calculations, because you'll want to be paying both at the same time.
State/IRS also have different statute of limitations and policies, do some reasearch on them in particular.
If either the State or the IRS is being absurdly unreasonable in negotiations (and it happens), the other legal recourse is a Chap 13 which can address most personal taxes and force the payment plan on them; alternatively if you're near the term on the SOL where your debt becomes uncollectable, can just wait and make the IRS come to you; however, that IRS tax lein will hang out on your credit report until addressed (either via paying it or DirectDebit payment plan) and if you have the opportunity to resolve it "easily," I certainly would rather than waiting, it delays a lot in our possible future financial lives. State lien YMMV, my Cali state tax lien which is paid, isn't going to fall off my credit report for years unfortunately but was such a small number anyway and being paid apparently various underwriters just overlook it even if it's going to depress my FICO score for a long time to come. Some other states as I understand it once paid the lien gets withdrawn.
Anyway that's about the limit of my knowledge, other than to suggest before approaching the IRS, order your tax transcripts for the given years in question: there's a lot of good information on there which may be handy in successfully negotiating the process and it's the document the IRS will be working off of for their side.
