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  • IRS Relaxes Offer in Compromise Regulations

    Monday 13th of August 2012 8:55:42 PM

    IRS recently announced that they are relaxing the rules of the Offer in Compromise (OIC) so that more taxpayers can take advantage of this tax debt help program.

    OIC have series of regulations that will enable tax payers to pay off their balance taxes in a lesser amount with the IRS, and in some cases others can settle their tax debt in pennies. IRS modified some of the taxpayers eligibility requirements to obtain OIC.

    Among the changes announced were: 

    1. IRS calculations in the taxpayer’s future income. The changes made were seen beneficial to taxpayers with more friendly provisions. Future income is one of the big qualifiers in obtaining OIC. In the event that IRS determines that a taxpayer can make enough to pay them back in the future, they can reject the agreement.
    2. In determining the disposable income, new regulations for taxes owed to the state will be take into consideration as well as accepting student loans.
    3. The minimum amount of a qualifying offer has been reduced. In the past, IRS determines monthly disposable income by multiplying it to 48 months. The resulting number is what they will likely consider as a settlement offer. For example, before if you owed $15,000 in back taxes and had a disposable income of $150 per month they would likely consider offers around $7,200. Now, they will consider offers in the area of $1,800 after multiplying the disposable income to only 12 months.
    4. Business owners may no longer have to add in equities in their business assets.
    5. IRS is also working on reducing the amount of time it takes to process an OIC. In the past, it   could take up to 18 months for them accept or reject the offer. Now, they hope to process it within six months.

    These new regulations will undoubtedly help thousands of people to solve their tax problems and start over. Therefore it is a must to follow carefully these new regulations of IRS in obtaining their Offer in Compromise program; and a tax representation provider like 911taxrelief.com can be a good option for assistance.

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