How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask socrateaser Your Own Question
socrateaser, Lawyer
Category: Tax
Satisfied Customers: 38801
Experience:  Retired (mostly)
Type Your Tax Question Here...
socrateaser is online now
A new question is answered every 9 seconds

Good evening...I currently owe approximately $57,500 to the

This answer was rated:

Good evening...I currently owe approximately $57,500 to the IRS and I have a payback plan with them of $973 per month...penalty of $8,064...and interst of $6261.
I need to try and arrive at a settlement now as I have existing indebtedness and an awful financial situation, but will borrow from family to resolve this.
Question- Will you please advise on how best to approach requesting a settlement...and if I offer 10,000. will they likely consider? Thanks H

The IRS seeks to collect 80% of all of the equity value in all assets owned by you that you can liquidate to raise cash (including your home, retirement accounts, motor vehicles, stocks, bonds, collectibles, jewelry, precious metals, etc.), plus either: 12 months of your net disposable income, if you plan to pay the offer in compromise within 5 months; or 24 months of your net disposable income, if you plan to pay the offer in compromise in more than 5 months.

Net disposable income equals gross income from all sources, minus reasonable expenses. However, the IRS has a schedule of the cost of various expenses, and if you exceed those amounts in calculating your net disposable income, your offer will be rejected, unless you can justify the additional expenses as necessary/unavoidable.

The best way to determine what the IRS will accept is to actually fill out the Offer in Compromise form. Then, you will know exactly what you can offer.

Once you fill out the form with what you believe are the true numbers, compile the IRS schedule numbers and see how they differ from what you believe are your unavoidable expenses. That's the zone in which the negotiations will occur. If you want to avoid some tax, and thereby increase your standard of living while making the offer payments, you must be able to justify the additional expenses.

That's pretty much the entire process in a nutshell.

Please let me know if my answer is helpful or if I can provide further clarification or assistance.

And, thanks for using!
socrateaser and other Tax Specialists are ready to help you

Related Tax Questions