If you avoid these 4 mistakes, you will ideally position yourself to eliminate your IRS tax liability:
- Overlooking the Best Tax Elimination Method. The offer in compromise is powerful tax relief solution, yet it’s not the only tax solution. It’s a big mistake to ignore the other possible tax forgiveness strategies such as:
- Partial Pay Installment Agreement – You make minimum payments to the IRS, and the tax liability is never paid back.
- Currently Not Collectible Status – It can be temporary or permanent.
- Bankruptcy – If you qualify, bankruptcy wipes out income tax, penalties, and interest. Bankruptcy also instantly stops IRS collection, such as a levy.
- Penalty Abatement – After shrinking the tax liability by abating the penalties, you can file and offer in compromise.
- Using a Cookie Cutter Approach. Present to the IRS an impressive package of information in a logical, organized, complete and persuasive fashion. A cookie cutter approach hurts your chances to get the offer accepted.
- Ignoring the Bankruptcy Factor. Use the threat of bankruptcy to make your offer more attractive to the IRS. The Internal Revenue Manual allows taxpayers to compare what the IRS would receive from bankruptcy to what the IRS would receive from an accepted offer in compromise.
- Taking “No” for an Answer. Many offers are accepted on the second try. Appellate examiners are very helpful when you present your case in an organized, logical, and persuasive fashion.
For valuable information on the offer in compromise and other tax solutions, go ahead and get the Faith Firm free book The Truth about Tax Settlement and Alternative Tax Solutions