The IRS Offer-In-Compromise program started off as a noble effort by the IRS to aid taxpayers in need of a second chance. The idea was to release an individual from his debt to the IRS in exchange for receipt of a lesser amount than what was due.

However, it soon became clear that the program was neither fair nor noble. Statistics showed that people living in certain IRS Districts of the United States had a much better chance of getting an offer approved than those living in certain other IRS Districts.

From our experience, this could be attributed to whether the district overseeing the offer program set policies which embraced the program and its goals or the district set policies which made it next to impossible to get an offer approved.

Then, several years ago, the IRS decided to change policy and make the initial submission of the offers a national decision. Our best guess is this was intended to ferret out the bogus offers, so that only offers that deserved to be considered ended up in the hands of revenue officers at the district level. Yet, this did nothing to change the policies of the districts when it came to considering offers.

It has been our experience that some districts follow guidelines that completely ignore the fact that a taxpayer is insolvent and on the verge of bankruptcy. They will 'pick and choose' only financial information which supports their contention that an offer should be rejected, while ignoring financial information which indicates that the taxpayer is insolvent or bankrupt.

Why is this important? Because the IRS guidelines that a revenue officer must follow in determining whether an offer should be accepted or rejected is published in the Internal Revenue Manual. Many revenue officers ignore the fact that a taxpayer's only recourse, outside of the offer, is to file a petition for liquidating bankruptcy. But, according to the Internal Revenue Manual, these special circumstances should be considered!

How can IRS personnel choose not to consider these special circumstances? The revenue officers we spoke with told us the IRS officials in charge of overseeing the offer-in-compromise program in their district did not allow them to give any special consideration to taxpayer's considering bankruptcy, even though it is set forth in the Internal Revenue Manual.

Rather than waste our clients time trying to convince an IRS Revenue Officer to accept an offer that he is intent on rejecting, we have found that appealing a rejected offer on the grounds that the IRS Revenue Officer ignored these special circumstances will often yield better results.

Another hurdle that is often encountered in attempting to get an offer accepted has to do with the standard allowances the IRS allows for certain living expenses. The IRS only allows a certain standard amount to be spent on housing and utilities, automobile ownership and operating costs, clothing, food, and personal care products. If you spend more, tough luck, they'll treat the additional amount a part of the monthly net discretionary amount used in calculating the offer amount you can give them.

Let's not forget about credit card debt. The IRS treats this and all unsecured debt as if it doesn't exist. If you're paying $300 a month in credit card debt, they will treat your monthly net discretionary income as if you had $300 a month more by not allowing you to deduct this amount as a necessary living expense.

So, what does this all mean to you? You need someone experienced on your side and you get that experience with Consultax! Go to CONTACT US now to get started, or if you would like to learn more about how Consultax can help you with your offer IRS OFFERS-IN-COMPROMISE.