tag:blogger.com,1999:blog-5318082859763132149.post8627559598762646070..comments2023-07-09T01:07:11.837-07:00Comments on IRS Tax Attorney: www.irstaxattorney.comhttp://www.blogger.com/profile/00198580464865979644noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-5318082859763132149.post-7704438800731170042007-08-20T09:32:00.000-07:002007-08-20T09:32:00.000-07:00Taxpayers are expected to pay the entire amount of...Taxpayers are expected to pay the entire amount offered in as short a time as possible. Acceptable offer terms are determined by the offer investigator and are not limited to the proposal of the taxpayer.<BR/><BR/>The amounts and due dates of payments must be specified on Form 656.<BR/><BR/>As a result of the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA), there are three types of payment terms the IRS and the taxpayer may agree to:<BR/><BR/>Lump sum cash offer – An offer in which the offer amount must be paid in five or fewer installments upon written notice of acceptance. Twenty percent of the total amount of the offer must be paid with the Form 656, Offer in Compromise. If the installments will be paid in five months or less, the taxpayer should offer the realizable value of his assets plus the total that could be collected over 48 months of payments (or the remainder of the statutory period for collection, whichever is less). If the installment payments will be paid in more than five months, the taxpayer should offer the realizable value of his assets plus the total that could be collected over 60 months of payments (or the remainder of the statutory period for collection, whichever is less). <BR/>Note: Realizable value is defined as the quick sale value (amount that a taxpayer could reasonably expect from the sale of an asset if sold quickly, typically in 90 days or less) minus what the taxpayer owes to a secured creditor. The creditor must have priority over a filed Notice of Federal Tax Lien before the IRS will allow a subtraction from the asset’s value.<BR/><BR/>Short Term Periodic Payment Offer – An offer in which the taxpayer must submit the first payment with the offer and must continue to make regular payments during the offer investigation. The offer amount must be paid within 24 months from the date the IRS receives Form 656, Offer in Compromise. The offer amount must reflect the taxpayer’s realizable value of assets plus the amount that could be collected over 60 months of payments (or the remainder of the statutory period of collection, whichever is less). Failure to make the regular payments during the offer investigation would cause the offer to be withdrawn.<BR/>Deferred Periodic Payment Offer – An offer in which the amount must be paid over the remaining statutory period for collecting the tax. As with the short term periodic payment offer, the taxpayer must submit the first payment along with Form 656, Offer in Compromise and must continue to make regular payments during the offer investigation. The offer amount must reflect the taxpayer’s realizable value on assets plus the amount that could be collected through monthly payments during the remaining life of the collection statute. Failure to make the regular payments during the offer investigation will cause the offer to be withdrawn.<BR/>Taxpayers may designate in writing how the IRS should apply the offer payments (e.g. lump sum cash, short term, deferred periodic) by specifying the type of tax, period or year, penalty, and interest due. Without a written designation request, the IRS will apply the payments in the best interest of the government. The $150 application fee reduces the assessed tax or other amounts due and cannot be designated by the taxpayer.<BR/><BR/>All offer payments (e.g. lump sum, short term, deferred periodic) are considered “payments on tax” and are not refundable deposits regardless of whether the IRS declares the offer not processable or later returns, rejects, withdraws, or terminates the offer as a result of its investigation. When this happens, the IRS will apply the payment(s) to the taxpayer’s outstanding tax liability.www.irstaxattorney.comhttps://www.blogger.com/profile/00198580464865979644noreply@blogger.com