Return of Offer in Compromise - Solely to Delay

Tax Attorney Alvin S. Brown Substantiates How IRS Collection Revenue Officers Are Able To Prevent IRS Consideration Of An Offer in Compromise With Allegations That The Offer in Compromise Was Submitted “Solely to Delay” IRS Collection Efforts

IRS Revenue Officers are able to prevent Offers in Compromise, meeting the requirements of section 7122 of the Internal Revenue Code, from being considered for tax settlement with undocumented and unsupported allegations.

• 

Washington, D.C. (PRWEB) August 14, 2012

Tax attorney Alvin Brown will represent taxpayers, wherever located, to get their tax liability settled in an Offer in Compromise. A taxpayer must qualify for an offer in compromise under section 7122 of the IRS Code, the regulations under section 7122 and also under the IRS guidelines on offers in compromise.

Section 7122 of the Code permits the IRS to compromise a taxpayer's tax liability. Most of the offer in compromise cases are “doubt as to collectability” cases which limit the focus of the IRS to the amount collectible from a taxpayer rather than the amount owed, identified by the IRS as “reasonable collection potential.”

The legislative history of § 7122, congressional amendments to the statute, and policy changes by the IRS all support the defined purpose of an Offer in Compromise to provide a “fresh start” to individuals and businesses qualifying for an Offer in Compromise under present law and current IRS guidance. The Conference Report to the IRS Restructuring and Reform Act of 1998, PL 105-206, 112 Stat. 685, 7/22/98, states:

"The IRS should be flexible in finding ways to work with taxpayers who are sincerely trying to meet their obligations and remain in the tax system. Accordingly, the Committee believes that the IRS should make it easier for taxpayers to enter into offer-in-compromise agreements, and should do more to educate the taxpaying public about the availability of such agreements."

"The Senate amendment provides that the IRS will adopt a liberal acceptance policy for offers-in- compromise to provide an incentive for taxpayers to continue to file tax returns and continue to pay their taxes."

Tax attorney Alvin Brown will always send in an Offer in Compromise for a client with a legal memorandum citing the technical authority for offers in compromise and the very liberal tax policy published in the legislative history, as noted.

Alvin Brown & Associates, a tax law firm specializing in IRS controversies throughout the U.S. and abroad, http://www.irstaxattorney.com, determined that a business located in Rathdrum Idaho, qualified to eliminate its tax debt in an “offer in compromise” under the § 7122 statute, regulations and the guidelines for an offer in compromise in the IRS Internal Revenue Manual. The IRS Centralized offer in compromise office in Holtsville, New York, received the offer in compromise and assigned it an Offer Number: 1001041265.

Tax attorney Brown has had recent client cases that he believes to not meet the "liberal" standards for processing reflected by Congress in the legislative history for offers in compromise. According to Alvin Brown, the IRS Service Centers that process offers in compromise will return an offer in compromise stating that it was submitted “solely to hinder or delay our collection actions.”    This non-processing of an offer in compromise is triggered when a Revenue Officer, limited to work only on IRS collection issues, prepares a Form 657 requesting that the Service Center not process the offer in compromise because it would hinder an IRS collection matter.

There are many problems with this procedure according to Alvin Brown based on his experience in dealing with offer in compromise cases. The following are the observations of Alvin Brown in dealing with the IRS as a "tax attorney" in representing clients for offer in compromise settlements:

1. The Revenue Officer can prepare the Form 657 and prevent the Service Center from processing the Offer in Compromise, even if there is no pending IRS collection action.
2. The Revenue Officer manager does not review the Form 657 in most cases, and that means that the Form 657 does not have to be accurate.
3. Although the Service Centers indicate they have investigated and agree with the Form 657 recommendation, as a practical matter the Service Centers automatically accept the recommendation of the Revenue Officer.
4. The Service Center managers do not routinely return telephone calls to discuss the issue.
5. The Service Center employees defend the return by referencing the Revenue Officer and her objections to the consideration of the offer in compromise.
6. The office of the Local Taxpayer Advocate does not provide any assistance in these cases.
7. The National Taxpayer Advocate has refused to provide any assistance in dealing with this systemic problem, even in cases where there is no pending collection action.

It is the opinion of Mr. Brown, that Revenue Officers can be capricious in preventing consideration of an offer in compromise that meets the statutory standards of section 7122, the regulations under 7122, the Internal Revenue Manual administrative guidelines, and thereby undercut the intent of Congress to be liberal and flexible in giving taxpayers a "fresh start" in offer in compromise situations.

Mr. Brown identifies the problem he has identified as just one example of the need for IRS Oversight Hearings.

Alvin Brown & Associates
575 Madison Ave., 8th Floor
New York, NY 10022-8511
(212) 588-1113
ab(at)irstaxattorney(dot)com
http://www.irstaxattorney.com

www.irstaxattorney.com (212) 588-1113 ab@irstaxattorney.com