Episode 12: IRS Offer-in-Compromise Myths

In this episode, Jerrod Oltmann and I discuss the myths and misunderstandings out there regarding the IRS offer-in-compromise program. This what those national tax resolution firms are talking about when they say you can settle your taxes for "pennies on the dollar" or for the "least amount legally possible". 

The offer-in-compromise is essentially a contract between you and the IRS to settle your tax debt. In a future episode, Jerrod and I will talk about how an offer works in detail. Just understand for now that most people don't qualify. The reason is ability to pay. Something we discuss at length in this episode.

We also puncture the myth that you can't do an offer if you make a decent income or have assets. So you will want to listen for that part of the discussion. 

Finally, we talk about the big daddy of them all, the myth that an offer will take care of everything and you don't need to do anything else. One of the biggest stumbling blocks for an offer is the requirement that you be current with your taxes as a condition of the offer being accepted by the IRS. This means filing your current tax return on time and making sure you pay in enough (whether through your wages or by making estimated tax payments) to not come up short on next year's taxes. Fail this and no matter how deserving, you will not get an offer accepted.

In our second segment, we discuss what warning signs you should look for when hiring a tax preparer. Many people are not aware that even if your tax preparer is bad, you are still on the hook for any unpaid taxes, interest and penalties. So it pays to know how you can tell whether or not you are dealing with an honest preparer

Finally, we discuss how the IRS is using the club of penalties to compel tax preparers to "audit" their clients. With the increase in fraudulent claims of refundable tax credits, the IRS has foisted additional due diligence requirements on tax preparers. Jerrod and I go through the different levels of due diligence and discuss some things tax preparers should look for to avoid trouble from the IRS.

 

As always, I'd like to thank Jerrod Oltmann, enrolled agent, for his help is producing this podcast episode. Jerrod is another tax professional who helps people tackle their IRS tax problem. You can read more about Jerrod's on his bio page at: https://www.jpoea.com/about/ 

If you or someone you know has a tax problem, call our office at 207-502-7181 or email us at jwade@jdwadelaw.com. We will be glad to help you. Otherwise, please enjoy our content and let us know if there are topics you'd like us to discuss.