Can You Settle Your Tax Debt for Less with an Offer in Compromise?

[enigma]

W00t!

Finished em! With 9 hours to spare this year!

-Never put off for tomorrow what you can put off for day after tomorrow, I always say.

 

[N_Quire]

Well done, I trust some of that money will go to pay my welfare benefits so I can sit here all day and learn useful stuff

 

[BoulderHead]

Originally posted by N_Quire
Well done, I trust some of that money will go to pay my welfare benefits so I can sit here all day and learn useful stuff

Me too. I'd hate to think it was going for bunker-busters and other WMD.

 

[Frac]

You know, as long as you don't owe state or federal any extra dough you can file your taxes whenever you please.

 

[Monique]

The IRS is stupid, really!

So I am here as a non-immigrant but I might still be regarded as a resident for tax purposes, so I called them.

Alien services, they take a message (which is limited in length) and then they will call back in three days! I had to give a time when I would be available within a 3 hour window, otherwise they would answer by email.

I'm smart so I submitted the same question twice :P Guess what: I got two different answers!

Saturday morning 11 am, a lady calls, answers my first question:
You are a resident and cannot claim a tax treaty benefit since you have overstayed your time limit. I didn't get the second part of my question since she just hang up on me. That means I would have to pay back a complete sum of two years in taxes! I asked her where I could get a professional interpretation of the tax law.. her answer: nowhere, you have to interpret it yourself. I pushed her, same answer.

Saturday morning 11:30 am, a male calls, I should claim myself as a non-resident and I have the right to claim the tax treaty benefit until the end of this year. If I wanted a more thorough answer he recommended me to contact a certified something/one. That sounded good.

Tuesday afternoon, I got an email: we're unable to contact you, to answer your question go through publication this and that (which I had already done) very helpfull *ugh*

Moral of the story, always call twice, possibly three times *sigh*

 

[Monique]

So which certified place could I go to to get a detailed interpretation of the tax law? And how much money is that going to cost me?

I can't imagine over-staying a day and having to pay back taxes for two years since the treaty would be lost..

 

[damgo]

H&R Block will probably work. I don't know how much it'll cost you.

I hesitate to say it, but if the IRS is giving you multiple answers, you're almost certainly safe just picking the best one and going with it. Pretty much everyone I know has just guessed at answers to similar sorts of questions on their returns, and never been asked about it.

 

[Monique]

So if I flee the country and don't return in 4 years I should be safe? :P Isn't that a rule that they cannot ask questions after four years?

'Cause if I DO the wrong thing and they find out... boy, I will be in trouble because they are very strict when it comes to THEM not getting money. Interest on the missing amount, fines etc.

I once saw a show on 20/20? Where people were advocating that filing a tax return is a voluntairy act, they were not required by law to pay tax.. they were even giving classes how to not pay ANY tax, living in large villas, driving multiple cars, german or italian. Nothing wrong with that in their opinion. Big brother found out and they are doing jail-time at this moment :) Stupid people :)

 

[damgo]

lol... hmmm I don't think they will chase you down if they can't even figure out a consistent answer the question themselves. They have a hard enough time getting people who are deliberately cheating. Remember a couple years ago they accidentally paid out ~$20 million to people who claimed a slavery-reparations tax credit?... except of of there is no such thing, it was a well-known hoax. Oops. :)

Anyways my aunt works for the IRS, doing audits... I can ask her if you want.

 

[Frac]

Originally posted by Monique
So which certified place could I go to to get a detailed interpretation of the tax law? And how much money is that going to cost me?

Go to H&R Block, they can advise you for free.

 

[enigma]

Originally posted by Monique
So if I flee the country and don't return in 4 years I should be safe? :P Isn't that a rule that they cannot ask questions after four years?

Statute of limitations is 7 years. If they do notice something is wrong and make steps to correct it before 7 years, I think you're still liable after that time, though.

Believe it or not, if you're not trying to scam them, they can be accomodating.

I had a past housemate who was a bit of a screwup. He decided one year to "get his IRS thing in order". That meant trying to pay off the last 4 (!) years worth of taxes. He found out that they have a form which is a sort of "bargaining" chip. You offer them an amount of money you are able and willing to pay, and if they agree, they wipe the slate clean. Better that they get some money than getting no money, and paying lawyer fees to get you punished also. Being the responsible citizen he was (laugh), he offered them a generous $0. I moved out before I found out if they told him to piss up a tree or not.

 

[Kerrie]

i think enigma is referring to the offer in compromise...something i dealt with last year...basically i offerred $300 instead of $2000 from 1993...also Monique, i would check with a college close by that has a law school because you may be able to get a college student who is practicing tax law to help you...these students are under the guidance of a professional tax attorney-or as in my case, the student that helped me was under the advise of an ex-employee of the IRS of 25 years...

what people don't understand is the IRS is VERY willing to work with you, as long as you come forth...for this offer in compromise, they will compare your income to debts-so if you have an income that barely covers your debts (school loans for example), they will take that into consideration...