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offer in compromise

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095489487

Member
What is the name of your state? new york
We submitted an offer in compromise to settle trust fund monies from old corporation. They rejected our offer saying we could pay more without even looking at our actual expenses (they used some sort of tables that said where we live it should only cost x for housing, transportaion etc) that were submitted. We are in the process of appealing that decision. If that is rejected again what happens then? We have no more money to increase our offer or to hire an attorney. They already have a lein on our home. There is only 27 months left of the 10 years they can collect. Should we just hold on for 27 months? My husband is also considering taking a different job -( less stress) would make less money. Do they have to consider different amount of income?
 


L

loku

Guest
Your plan of holding on for 27 months won't work. The statute of limitations on collections is suspended during the OIC process. That means the period of time the OIC was pending, they could not collect from you and that time is tacked on to the end of the ordinary period of limitations.



The IRS bases your necessary expenses on the "National Standard Expenses" schedules. IRS Publication 1854 explains this and has the schedules.

If the IRS determines that the use of the schedules is inadequate, the will grant an extra allowance; however, you have to provide documentation that supports your case.
 

095489487

Member
Thank you for answering. The 27 months does include the time IRS took to review my offer. Although I submitted actual expenses - they still only used the schedules. The payroll taxes were from old corporation. Are the officers responsible for the penalties and interest or just the trust fund money? I am being told 2 different things. Also for a payment plan is it 5 years PLUS the remaining 27 months OR just the 27 months? Again I am told 2 different things.
 
L

loku

Guest
The willful failure to collect or account for and pay over a tax or willful attempt to evade or defeat a tax by a "responsible person" required to collect, account for, and pay over the tax is subject to a civil trust fund recovery penalty. (Taxes withheld by employers from employees' wages are referred to as trust fund taxes.) The penalty is equal to 100 percent of the total tax that is evaded or not accounted for and paid over. (IRC section 6672) The IRS cannot assess a trust fund recovery penalty without first notifying a responsible person of its intent to do so, at least 60 days before making notice and demand for the penalty. However, the IRS may initiate collection without giving the required notice if it first determines that the collection is in jeopardy. (IRC section 6672(b)) "Responsible person" is an officer or employee of a corporation, or a partner or employee of a partnership, who is under a duty to collect or account for and pay over a tax. (IRC section 6671(b))
 

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