Seven Deadly Sins of Tax Relief Revealed: Critical Errors to Avoid in the IRS Offer in Compromise Process

While the IRS is more determined than ever to enforce collection activity forback taxes owed

,the IRS Offer in Compromise program can help taxpayers who are experiencing significant financial problems get a fresh start, if they qualify.

However, it is important to note that the IRS Offer in Compromise acceptance rate is less than 23% (less than one in four will be accepted) when a taxpayer prepares, submits, and negotiates his/her offer without professional expert representation. On the other hand, hiring professional tax help to negotiate a settlement with the IRS on your behalf can greatly increase your chances of qualifying for a tax relief settlement.

An experienced tax attorney or Certified Tax Resolution Specialist (which can only be an attorney, CPA or Enrolled Agent) can help you qualify for this program by analyzing your current financial situation.

While taxpayers may always represent themselves before the IRS, many taxpayers find dealing with the IRS frustrating, time-consuming, intimidating or all of the above. Whether you hire professional tax help or go up against the IRS on your own, check out these Seven Deadly Sins of Tax Relief that you will want to avoid when applying for an Offer in Compromise.

Tax Relief Deadly Sin #1: Failing to file a tax return when due, without extensions, during the offer process. The IRS does not make a habit of bailing people out with tax relief for back taxes owed. They want you to know that this is a one-time aberration on your part and that for the rest of your life you will file and pay your taxes on time. In order to help convince them of your good intentions, it is crucial to file all subsequent tax returns on time.

Tax Relief Deadly Sin #2: Failing to pay any taxes when due during or after submission of your offer. See Deadly Sin #1. The IRS won't take you seriously if you flake on payments during the Offer in Compromise process. If you are serious about resolving your tax debt, you need to show that you will fully comply with the tax laws without further delinquencies.

It is also important to note that the IRS requires future compliance for a period of five (5) years from the date of acceptance of the Offer In Compromise, or until the offered amount is paid in full, whichever is longer. Compliance is the timely filing and paying of all required returns and taxes when due.

Tax Relief Deadly Sin #3: Hostility toward anyone at the IRS. Remember that old saying, "You catch more flies with honey than with vinegar?" No one likes a sycophant, but treating any IRS employees you encounter with courtesy and respect will help keep your back tax relief process moving smoothly.

Your experience will not be with the IRS per se. Your experience will be with an individual who may like or hate giving taxpayers deals. We see this behavior every day. Remember, you can't pick who you want to evaluate and handle your offer; it is simply the luck of the draw. So it's best to keep your cool during the process.

And if you are represented by a tax problem resolution specialist, make certain that the Service Agreement or Contract for Services indicates that the fees paid include representing you at Appeals, as your OIC has a good chance of being rejected by the first IRS employee charged with evaluating it.

Tax Relief Deadly Sin #4: Misrepresenting your financial position in any way on any document. The taxpayer bears the burden of proof to show exceptional circumstances exist such that collection of the full amount of IRS back taxes would create economic hardship or where compelling public policy or equity considerations provide sufficient basis for compromise.

Attempting to lie, fib, misrepresent, omit, equivocate, dissemble, or otherwise tell them an untruth will not win you an Offer in Compromise and may even land you bigger trouble than when you started the process. All documents you sign are signed "under penalty of perjury."

Tax Relief Deadly Sin #5: Failing to meet a deadline the IRS or a tax attorney or Certified Tax Resolution Specialist gives you. If the IRS - or your tax attorney or Certified Tax Resolution Specialist - gives you a deadline, you need to honor it. Give yourself a cushion of time to find that old bank statement or fill out that tax help form. You don't want to have to drive 50 miles with a sick kid in the back of your car to make the midnight FedEx deadline in the nearest big city.

Tax Relief Deadly Sin #6: Misleading or deceitful statements, material omissions and non-disclosure to anyone at the IRS in verbal, written, electronic, or any other format. Again, if you don't play by their rules, they won't play tax relief ball with you at all. Don't fool yourself by thinking your rolled up stack of Ben Franklins is safely tucked away in an old coffee can at the back of the garage or in a numbered Swiss account. The IRS already knows every money-hiding trick in the book, and they will uncover all of your financial secrets.

Tax Relief Deadly Sin #7: Refusing, declining, avoiding requests for information or documents. They're going to find out all of your back tax secrets anyway, so you might as well be upfront about them. Better to rip off a bandage quickly, as it were, and start the process of resolving your tax problems once and for all.

While the IRS is more determined than ever to enforce collection activity forback taxes owed,the IRS Offer in Compromise program can help taxpayers who are experiencing significant financial problems get a fresh start, if they qualify.

However, it is important to note that the IRS Offer in Compromise acceptance rate is less than 23% (less than one in four will be accepted) when a taxpayer prepares, submits, and negotiates his/her offer without professional expert representation. On the other hand, hiring professional tax help to negotiate a settlement with the IRS on your behalf can greatly increase your chances of qualifying for a tax relief settlement.

An experienced tax attorney or Certified Tax Resolution Specialist (which can only be an attorney, CPA or Enrolled Agent) can help you qualify for this program by analyzing your current financial situation.

While taxpayers may always represent themselves before the IRS, many taxpayers find dealing with the IRS frustrating, time-consuming, intimidating or all of the above. Whether you hire professional tax help or go up against the IRS on your own, check out these Seven Deadly Sins of Tax Relief that you will want to avoid when applying for an Offer in Compromise.

Seven Deadly Sins of Tax Relief Revealed: Critical Errors to Avoid in the IRS Offer in Compromise Process

By: Michael Rozbruch

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