There are more favorable qualifications for its Offer in Compromise (OIC) program. The IRS will still use a set formula to determine the amount it is willing to accept, but the variables are changing. Here’s how it used to be under the original OIC program: When you complete IRS Form 433-A to accompany the offer request, you report your monthly income and expenses for them to plug into a stringent formula for acceptance. The IRS now has new, more relaxed National Standard tables for housing, transportation, and household expenses. The agency is willing to accept higher costs. In fact, an allowance will be included where a certain percentage of credit card payments can be listed as an allowable expense. Numbers for student loan payments and delinquent state/local income taxes will be considered in the formula now, where they were not previously.
The IRS wants to work with us to ensure throughput in this bad economy. So if you have a big tax liability and you’re on the insolvent side, fill out Form 433-A, and take it to your tax professional to see if you can settle for “pennies on the dollar!”
Pay Less Taxes
- Best Practices For Managing Your Business Cash Flow - March 18, 2020
- How to Choose Between Outsourcing and Hiring Financial Employees For Your Business - March 18, 2020
- Deferred Sales Trust Business Broker - May 21, 2018