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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3725
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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Three years ago I had to sell my 30 year old business. It

Resolved Question:

Three years ago I had to sell my 30 year old business. It suffered from the economy
and fell behind in its payroll taxes. I was burdened with a $200,000. debt. I was able
to borrow money from a friend and make an offer in compromise, $15,000. This was
accepted by the IRS in 2012. I've been unemployed for about 1 1/2 years. We have
fallen behind on our personal taxes for 2012. I found work 3 months ago,this has
enabled me to be to pay off 2012 taxes witnin 90 days. We owed $10,000 for 2012.
We have paid $6,500. and can pay the balance in 90 days. Apparently we cannot file form
9465 because of the offer in compromise. Is there any way to prevent the reinstatement
of the $200,000. With my employment we are finally making headway. My wife and I are
in our mid 60's. I've tried calling the IRS, impossible to get through! Please advise
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

NPVAdvisor :

The first thing that comes to mind is contacting a reputable CPA (ideally an enrolled agent) top take your case

NPVAdvisor :

You could always file for an appeal, but if you haven't received levy notices , it may actually be pre-mature for that

NPVAdvisor :

Because you are in that precarious place where you could jeopoardize things ... or I would just say send anything you can in as quickly as you can

NPVAdvisor :

Has everything finalized on the OIC? Check paid and accepted along with notification of acceptance?

NPVAdvisor :

Enrolled agent have essentially a conduit to represent you in a more predictable and efficient manner than others

Customer:

OIC was accepted about 6 months ago! I have the notification of acceptance.

NPVAdvisor :

Honestly you're in great shape (you've come a long way) ... it would just seem a shame not to insulate things by having someone that really knows the system

NPVAdvisor :

While we're talking, I just wanted to get that to you .. don't rreally think it applies, but good to have

Customer:

Is the reinstatement of $200,000 an automated process is it a decision making process?

NPVAdvisor :

It is a decision, however, after a certain period, there may be notice letters that kick out

NPVAdvisor :

Have you received anything at all relative to 2012?

Customer:

Yes a 2nd reminder now showing $6,000. no owed. They have yet to post another $1,500. The notice offers a

Customer:

installment program but not to those who have undergone an OIC

Customer:

Excuse me should read $6,000. now owed.

NPVAdvisor :

My gut tells me two things (sending in something as frequently as possible will help) and (you are the poster child - ideal candidate- for sitting down with someone who has had experience in these matters) .. let me show you a piece of the internal guidelines for IRS agents re: rescinding an OIC

Customer:

What is an enrolled agent? An IRS agent? Should I continue to try to engage, by telephone, with the IRS?

NPVAdvisor :

No they are not working for the IRS ... they have passed a rigorous training program sponsored by IRS and enrolled to "practice before and represent clients before the service."

NPVAdvisor :

they specialize in these kinds of thing and in my experience can communicate more efficiently ... gets you out of that front lines stuff

NPVAdvisor :

see this:

NPVAdvisor :




  1. Rescind an offer in the following manner:




    1. Prepare a letter to the taxpayer identifying the offer by the day it was accepted, and advising that the acceptance of the offer is rescinded and the acceptance letter is revoked.




    2. Include in the letter the grounds for rescission in general terms with a demand for payment of the unpaid tax liability.




    3. All rescission determinations must be reviewed and approved by Counsel before a rescission letter is forwarded to the taxpayer.



      Note:


      The letter must be signed by the same level of approval that accepted the offer.



       




    4. Document the basis for the decision to rescind and any taxpayer contact on AOIC.




    5. After all approvals have been received, notify the appropriate MOIC liaison of the rescission and request input of a TC 781 to ensure the case is reassigned to the field for appropriate collection action.




     









5.8.9.3 (04-15-2011)
Potential Default Cases






  1. An offer can reach a potential default status in one of three ways:




    1. The taxpayer failed to make timely payment of the amount due based on the terms of the offer or a related collateral agreement;




    2. The taxpayer has not adhered to the compliance provisions of the offer; or




    3. Taxpayer failed to return an erroneously issued refund.


       




     




NPVAdvisor :

you may find this interesting: http://www.irs.gov/irm/part5/irm_05-008-009.html

NPVAdvisor :

And this: http://www.csea.org/

NPVAdvisor :

the several lines above, I pasted from the first link here, an IRS internal manual (which they actually make public)

Customer:

I have the name and phone number of the IRS agent that worked with me to complete the OIC.

Customer:

Should I contact her? Or would that expedite a default?

NPVAdvisor :

Ahhh, if that relationship was amicable, and you don't feel he/she ever mislead you, that might be a VERY good place to start

NPVAdvisor :

just saw your last question

NPVAdvisor :

What's your gut?

NPVAdvisor :

The thing about an EA? they represent you .... She represents IRS

Customer:

Well it's one of two: I can only offer the EA the same thing I could offer the IRS. Complete payment of 2012 tax balance in under 90 days. Cost of EA? Where do I find one and can we deal over the phone?

NPVAdvisor :

Yes, you aren't making an offer to the EA ... the EA would help you devise an offer that would be acceptable to IRS .. the EA works for you, not them

NPVAdvisor :

don't let the term agent fool you .. they are independent business people ... some CPAs some tax attorneys ... and have a lot of experience with the internal procedures and where the lines are drawn

NPVAdvisor :

Talking to someone at the collections appeal board may also be another way to go

NPVAdvisor :

You may appeal many IRS collection actions to the IRS Office of Appeals (Appeals). Appeals is separate from and independent of the IRS Collection office that initiated the collection action. Appeals ensures and protects its independence by adhering to a strict policy of prohibiting certain ex parte communications with the IRS Collection office or other IRS offices, such as discussions regarding the strengths or weaknesses of your case.

NPVAdvisor :

That's all min that link I gave you, the pdf file ... to get started with them...


Complete Form 12153, Request for a Collection Due Process
or Equivalent Hearing, or other written request with the same
inform

Customer:

That makes me feel we are compounding offers. I need to pay 2012 in full plus interest.

NPVAdvisor :

I agree .. that was my first intuition .. the EA suggestion is because, again, they know where the lines are drawn

NPVAdvisor :

As I said sending in as much as quickly as possible, and being proactive, in my experience, has ALWAYS worked best

Customer:

So form 12153 would allow me to state my case? You think this would be a better approach , I wouldn't want to catch my IRS agent on a bad day.

NPVAdvisor :

Yes, the collection appeals office is the closest thing you'll find to someone that represents you in INSIDE the IRS. That are not allowed to discuss your case with the collections side of the organization.

Customer:

1. It sounds like the process of rescinding an OIC takes some time? 2. If I engage with my OIC IRS agent could she possible expedite the rescinding of the OIC? If she said she would move forward to rescind would form12153 block that?

NPVAdvisor :

It would stall that ... they have to give you a hearing before taking action. I have a colleague who says it won't buy you years, but it will stop the locomotive long enough for you to weigh options and talk with an expert. ,, I have heard, anecdotally (hearsay), that one of the main things it does is get you to someone that will listen, at the manager level.

Customer:

I don't want to take up much more of your time. Can the IRS agent who handled my OIC make a decsion to accept

Customer:

my offer to payoff in under 90 days?

NPVAdvisor :

I doubt it. that's probably a decision that she'll say has to go to her manager.

NPVAdvisor :

But again, this is not a "way out there offer." But this is really crystal ball stuff, because there's a pretty wide disparity in the personalities out there, They're all people too. In my experience, the further up you go (not just talking to people on the front lines) the better chance you have ... the people that deal with the OICs are not just front lines people

Customer:

What if I talked to the OIC IRS agent, stating I will payoff 2012 taxes plus interest in under 90 days. If she says they are moving forward to rescind the OIC, then I would engage with the collection appeals office. Does this sound like a correct method of solving my problem. In the meantime I will sending substantial payments.

NPVAdvisor :

I think you have your arms around it ... just take it one step at a time and err on sending in anything you can .. even if it's small

Customer:

One last question, who funds the collection appeals office, are they just a taxpayers advocate that helps guide me through the process without having to hire an attorney, etc.?

NPVAdvisor :

Nope they are an IRS division. But again, not allowed BY LAW to talk to the collections division.

Customer:

You were extremely helpful, thank you!

NPVAdvisor :

Sorry to answer better, Yes they are a part of IRS, but are not the taxpayer advocates office ... the TA office probably would not help you here

NPVAdvisor :

You're very welcome. I think you'll be fine... just keep being proactive

NPVAdvisor :

If this has been helpful, I'd appreciate a positive rating. That's the only way they'll pay us here.

NPVAdvisor :

My apologies, but i have a 7:30 meeting here. Will move us to Q&A, you can rate or ask any follow-up questions there.

Expert:  Lane replied 1 year ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

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Expert:  Lane replied 1 year ago.


Hi John,

Just checking back in, (just broke out of the meeting)

Let me know if I can do more for you.

Lane




Positive feedback appreciated. That's the only way JA will pay us.

BUT, if you need more on this, come back here so you won't pay for another question.
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3725
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 7 other Tax Specialists are ready to help you

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