IRS Offer in Compromise and Fresh Start Program

[masscredit]

My back taxes are the last things that are hanging over me and it's time to try to take care of them. I'm been doing some research about the IRS's Fresh Start Program and Offer in Compromise. It looks like I should be able to qualify for those programs.  On the IRS side, I have a few years of 1040 taxes that are owed along with some business withholding 940, 941 and 944 taxes.  All of those total about $24k.

I own state income taxes that total about $8000. I'll have to see if programs like this are available in my state. Currently those taxes are listed in a non-collectable status.

So it's time to work on all of this. I pulled out everything over the weekend and seperated them by catagory. Also researched the tax liens that are on file at the local registry of deeds.  Now I'm gathering info and will get something together to submit to the IRS. Hopefully they will accept my offer and then I'll ask if the liens can be removed from my credit reports.  I'll move on to my state taxes after this is taken care of. 

If anyone has any advice, suggestions, ect... I'm all ears (and eyes ).  

Publications and forms that I found are -

Fresh Start Program -  http://www.irs.gov/uac/Newsroom/IRS-Fresh-Start-Program-Helps-Taxpayers-Who-Owe-the-IRS

Booklet - http://www.irs.gov/pub/irs-pdf/f656b.pdf

Form 656 - http://www.irs.gov/pub/irs-pdf/f656.pdf

Form 433 - http://www.irs.gov/pub/irs-pdf/f433aoi.pdf

One thing that I am wondering is if would cover everything as a whole (all 1040 taxes along with 940, 941 and 944s) or if I have to do one offer for each item like one for my 2007 taxes, one for the 2010 taxes then one for each of the business taxes. Or, would it be one offer for the total amount of each lien?  Some liens have a few items listed. 

Any advice will be greatly appreciated. If this isn't the correct forum to be researching this and you know of one that deals specifically with issues like this, please send the info my way.

Thanks!  

[ezdriver]

I spent one year going back and forth with the IRS on similar issues except that my numbers were much higher. Anyway, my recommendation [which I did] is to meet face-to-face with an IRS rep at your local IRS office. They have all of your stuff, from what you owe, online. I found it much easier to walk in and say look, I am overwhelmed and need your help sorting through this and working out a payment arrangement. They will guide you each step of the way. The end result was that I paid up some and others were deemed uncollectable. The uncollectable taxes also qualified to be included in my Ch 7 bankruptcy so I went ahead and included them.

It is important to notice that the IRS can come back at you for taxes deemed unclooectable today as your file remains subject to future review. Offers in compromise are not easy to get accepted. If you have any disposable income, the IRS will determine what you will pay based on their own analysis.

Good luck.

[newmomnewme]

I agree..go into your local IRS office (plan to go early and stay for a while)....I did have a federal tax lien; I paid it, they released it, I applied to have it withdrawn from my credit report and they granted the withdrawl within about three weeks. We will see how long it actually takes for the reports to catch up; I am sending them a copy of the letter and form this weekend. Fingers crossed! Good luck!

[masscredit]

Thanks for the info!  I used the calculator on their website to see if I qualify for an OIC. My income carely covers my bills some moneys and others I can be upsidedown. Based on those numbers, it showed my payments to be something like $5.00 per month for (if I remember correctly), 6 months.  No assets, and nothing else so it is what it is. 

[masscredit]

I'm going to have an accountant handle the OIC for me.  He has more knowledge and experience than I do on this, was an IRS agent for many years and will be able to navigate through all this better and faster than me.  Plus, if I do it, someone from the IRS might say something to me that may trigger a response that they don't want to hear so having someone handle it that doesn't have an emotional connection to all of this is another benefit. 

The accountant gave me a list of things to get together (3 months of bank statements, credit card statements, car purchase info and BK info). I'll be meeting with him to go over everything. He said the whole process might take about 6-8 months.