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.