So let's look closely at his numbers to see if their claim has any merit.
Their tax situation: This person owes the IRS $31,000.00 - he's in a $395 monthly payment plan.
Their finances: He and his wife make about $11,250.00 month before taxes
Their other expenses go like this:
National Standard $1482
Housing $2200 - (within their county's parameters)
Car payment $370
Transportation expense $400
Taxes $2200
State back taxes $223
Medical expense including out of pocket and health insurance: $540.00
All totaled their monthly expenses are: $7415.00
Subtract the expenses from their income and you have about $3835 in monthly disposable income.
Conclusion : I am sorry they just don't qualify for an Offer in Compromise - they have the ability to pay back what they owe before the debt would expire and well let's be clear: this company is going to very much disappoint them. This person should remain in his installment agreement. File his 2013 return with a small balance due - and call the IRS when his balance due notice comes and reinstate the same installment agreement.
In our opinion this person should NOT hire a tax professional. UNLESS in the future he starts paying his taxes in which we can consider getting the penalties off for a nominal fee, say $750?
Update - September 25th - on another case recently - Coast One Financial offered their services for $8900 to a person who had just very recently negotiated an installment agreement on their 100k - after working with a Revenue Officer. Revenue Officer's usually don't get these outcomes wrong. What would Coast One do for that fee? I am not sure - get penalties off - that's a big fee for not a guaranteed outcome!
