A complete glossary that provides the ability to quickly access articles and information to help with the accurate completion of the forms and formulas related to IRS compromise relief.

 

Tax Debt Relief Help

It is our objective to answer your questions by providing the most complete, accurate, comprehensive and trusted single source of substantive detailed information available on the web today associated with offers to compromise.  As a consequence, we begin with this introductory article to provide an overview of the content and format characteristics of this site and our services.

 

This discussion provides general information to familiarize you with IRS eligibility requirements, constraints, fees, forms and formulas associated with compromising a delinquent liability, before addressing each of the specific issues in detail. 

State & IRS Collections

This discussion provides detailed instructions to determine the amount of your adjusted net realizable equities or net worth that must be included in the amount you offer to settle your back tax debt. This calculation is the first of four mathematical components required when preparing offers for submission.

Income Tax Services

 

This article provides specific instructions to determine the amount of your monthly adjusted income subject to remittance and we will therefore address issues related to tax authority imposed financial standard parameters otherwise know as allowable monthly expense limits. 

 

 

This discussion determines the total amount of your future income that must be included in your compromise installment payment offer.

Self Help

This article is the last in a series of four articles and will sum the mathematical components future income and net realizable equities to determine reasonable collection potential or the total amount that you must offer, payment terms and eligibility.

Other Resources

This discussion provides information about the IRS administrative process that occurs after you submit offers and will therefore explain the issues of processibility, evaluation and financial analysis.

This discussion explains the impact that errors can have when preparing an IRS offer to compromise to settle back taxes, will provide statistical facts, a buyer beware warning and tips that will help you choose the services of a competent professional and simultaneously protect you from unethical State and IRS service providers.

 

 

An explanation of the preliminary services we provide to assure eligibility before you embark on a path that may result in rejection.

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OFFER IN COMPROMISE NET INCOME 

This article is the second in a series of four that provides specific instructions, guidelines and information to complete the offer in compromise tax forms.  This particular article will provide guidance to determine net income and will address issues related to IRS financial standard allowance guidelines.    

IRS ADJUSTED NET INCOME

IRS adjusted net Income is generally defined as your monthly income less allowable expense for taxes, child care, health care, current IRS and State tax payroll withholdings, current income tax obligations, court ordered payments, secured debt and any other expense items classified as necessity or required for the continued production of income.

FINANCIAL STANDARD GUIDELINES 

Expenses for food, clothing, housing, utilities and transportation are generally limited to the lesser of your actual expenses or the amount imposed by the IRS offer in compromise collection financial standards.  

Any deviations from the IRS imposed offer in compromise financial standards will require verification, negotiation and IRS supervisory approval.   The financial standards and allowable expense deductions to determine IRS adjusted net income are guidelines that are not statutory in nature and therefore, subject to reasonable cause debate.

TRANSPORTATION ALLOWANCES

Vehicles Ownership Costs: Generally, the expense for vehicle ownership is allowed only if you have a currently financed vehicle.

Vehicle Exception:  If a financed vehicle is over six years old and/or has an odometer reading more than 75,000 miles or more  the collection financial standard for ownership, is limited to two hundred dollars.

Vehicle Operating Costs: If you have a vehicle you are allowed the lesser of your actual expenses or the collection financial standard.

Note: There is an allowance for those that use public transportation.

COMPROMISE OFFERS AND NON-LIABLE PARTIES

Spousal Issues: If you are married and submitting an offer to compromise a separate liability divide the income of the liable spouse by the total income of the household to determine the liable spouses percentage contribution to household expenses.  The liable spouses contribution percentage is then applied to limit both the actual expenses and financial standard allowances.   

SHARED HOUSEHOLD EXPENSES 

Shared Expenses: If you share housing expenses with others verification of the total expenses are required to establish your proportionate contribution percentage by dividing your financial contribution by the total actual household expenses. This contribution percentage also your offer in compromise financial standard allowance. 

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