Eliminate Taxes for “Pennies on the Dollar”?
Posted on | May 13, 2007 | No Comments
We have all heard that the IRS will settle tax debts for pennys on the dollar. This tax settlement process referrs to the IRS offer in compromise program. Colorado Tax Attorney Kreig Mitchell recently posted an excellent article that exposes a few of the flaws in the IRS offer in compromise program. That article states in part:
The offer in compromise process is a bargaining process. Taxpayers often submit an initial offer in compromise and then either amend or submit a new offer in compromise at the instruction of the IRS appeals office. It is not unusual for a taxpayer to submit two or three offer in compromises to the appeals office in this process.
Mitchell goes on to explain that the IRS often misses these multiple offers in compromise, which will start triggering the new “deemed” accepted rules. Assuming that this is true, the US Treasury could lose a significant amount of revenues — despite Congressional attempts to fix the offer in compromise program.
