Resolution Success Stories

Alternatives to the IRS Offer in Compromise: Unusual Settlements on a Tax Debt

People in the tax resolution industry have a certain obsession with the Offer in Compromise program. Everyone knows the sales pitch - "settle for pennies on the dollar." Entire advertising campaigns by tax resolution companies have been centered around the Offer in Compromise program. We at Washington Tax love the Offer in Compromise - we have blogged extensively about this subject - in a 6 part series: Offer in Compromise: New and Improved -- a Six Part Series

However there are solutions to tax problems that offer the same savings as an Offer in Compromise - they just don't go by the name - "Offer in Compromise." And...they are NOT solutions that a tax professional can see at the beginning of the case. They kind of come to the case by accident or luck.

Not Offers in Compromises But They'll Work! :

Here's a few case examples:

A wage garnishment we negotiated - Yes a garnishment! We got the IRS to take $3600 a month from a very high income client ($500,000 a year) for 50 months or $180,000 effectively settling a $1,300,000 1040 tax debt. Pretty simple : the tax debt expires in November 2017. 180k to settle $1.3 million doesn't sound like a bad deal to me.

A monthly payment plan - Yes a payment plan! We prepared all tax returns for client from 2006 to 2012. Client only owed $8,000 but owed $50,000 for tax year 2006. IRS agent specifically didn't request 2006 so we didn't supply to her. So...client is in $250 monthly payments on $8000 of debt. You can't look at this any other way but as a deal! (Sometimes the IRS doesn't request older returns - so we don't get in the way of them.).

Client walks away from business - leaving $125,000 in payroll taxes with business. Client agrees to pay $5000 (the amount of the business' remaining assets) to satisfy IRS agent. That's it - case closed. Kind of an Offer in Compromise wouldn't you say? But just not in name.

Is 2024 the year to solve your tax issue? WATAX is ready to assist you now. Please call us at 1-888-282-4697 or email us a description of your tax issue and we'll contact you promptly.

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