Articles Posted in OFFER IN COMPROMISE


California Tax Attorney:

Here is a quick summary of a recent US TAX COURT case against the Internal Revenue Service to challenge the taxpayer’s right to deduct donations to a Catholic Church. The case involves a married couple who got audited by the Internal Revenue Service concerning donations they deducted on their Internal Revenue Service Form 1040 tax return.

Anonymous U.S. Tax Petitioners v. COMMISSIONER OF Internal Revenue Service

Los Angeles Tax Attorney Internal Revenue Service IRS TAX today announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Internal Revenue Procedure 2007-70. IRS TAX AUDIT – Auto Expense Miles

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

Many Los Angeles, Long Beach, Orange, Riverside, San Jose area business owners and taxpayers who have IRS tax problems may not have been aware of the tax settlement program called offer in compromise. Tax attorneys who handle these type of cases should prepare a comprehensive tax and financial analysis in order to prepare the most favorable tax settlement proposal which would result in minimum tax debt being paid to the IRS.

Although the IRS discourages and may create obstacles to have your IRS taxes reduced, a good tax attorney will often be able to prepare legal arguments that would contest and challenges put forth by the IRS concerning the tax settlement proposal.

An IRS Offer in Compromise allows taxpayers to settle their tax liabilities for less than the full amount. The objective of the IRS Offer in Compromise program is to accept a compromise when it is in the best interests of both the taxpayer and the government and promotes voluntary compliance with all future payment and filing requirements.

Major Changes to the IRS Offer in Compromise Program
The Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA), created major changes to the IRS IRS Offer in Compromise program as it relates to lump sum offers, periodic payment offers, and a determination as to when an offer is accepted. These changes affect all offers received by the IRS on or after July 16, 2006.
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Los Angeles, California Tax Attorney – Most common questions asked by our Los Angeles, Orange County, Riverside and San Francisco area tax payers regarding IRS Tax Settlement – Offer in Compromise to resolve IRS tax problem.

1. What is the Tax Increase Prevention and Reconciliation Act ?

The Tax Increase Prevention and Reconciliation Act of 2005 was signed into tax law on May 17, 2006. Section 509 of this law creates significant changes to the IRS Offer in Compromise (OIC) program by amending Internal Revenue Service Code 7122.

2. When did the IRS Tax Increase Prevention and Reconciliation Act law go into effect?

The law went into effect for all offers that are submitted to the IRS on or after July 16, 2006.

3. How did IRS Tax Increase Prevention and Reconciliation Act , Section 509, impact the OIC program?

IRS Tax Increase Prevention and Reconciliation Act , Section 509, amends Internal Revenue Service Code 7122 by creating a new subsection (c), titled “Rules for Submission of Offers in Compromise.” The new subsection (c) requires that offers submitted on or after July 16, 2006, (and not subject to the waiver with respect to low-income taxpayers or offers filed under doubt as to liability only) must be accompanied by partial payments of the proposed offer amount. The form of these partial payments depends on the taxpayer’s proposed offer and terms of payment. The law also establishes a time period after which an offer would be deemed accepted by the IRS.
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