Have you ever wondered why the IRS gives bad advice about their own Offer in Compromise program? I’ll tell you.
Hi, I’m Jeff Fouts, a tax attorney located in metro Atlanta, with a nationwide practice helping clients who have serious IRS problems.
If you have a tax problem, it’s important to know a little about the organizational structure of the IRS. Without some basic understanding of that you may get confused.
The IRS has six major divisions, like the Examination (or audit) Division, Criminal, and Collection Division.
Problem 1 – They All Do Different Jobs
The first thing that causes a problem is that each IRS division has a job to do that’s very different from the job that employees in other divisions do. IRS employees in one division don’t have a good understanding of the job of people in the other divisions. This comes as a surprise to most people.
Taxpayers think that each IRS employee should understand how to deal with any tax issue they may have. Unfortunately this is not the case.
Employees of the different IRS divisions are separated, and they’re not trained to know all things. Nor, for the most part, do they care to know.
This can create problems for taxpayers, or inexperienced tax professionals, when trying to deal with a taxpayer’s tax problem.
Problem 2 – Bad Advice
The problem that IRS employees all do different jobs is compounded by the fact that IRS employees don’t know what they don’t know. Let me explain.
Because IRS employees are doing very different, unrelated, jobs, this makes it impossible for them to give full, complete, well-rounded advice. Despite this, IRS employees often think and act as if they’re knowledgeable about every tax issue that a taxpayer ask them about, even though they lack the necessary training.
Problem 3 – Your Offer in Compromise Will be Rejected
I’ll give you an example. IRS collection employees sometimes advise taxpayers that they should, or shouldn’t, file an Offer in Compromise to settle your tax for less than they owe. The reality is they don’t understand how the settlement program works, much less whether it’s the right option or not. They’re not trained on the Offer program. They’ve never handled an Offer in Compromise. As a result they give misleading advice about the Offer in Compromise program.
This can lead to heartache because:
- some taxpayers think they’re not candidates for the Offer program, when in fact they are.
- and other taxpayers think they are candidates for the Offer program, when in fact they aren’t.
There may be some other option that fits a taxpayer’s situation even better than an Offer.
If you file an Offer in Compromise, when you don’t qualify, the Offer will be rejected. This is a danger because the IRS may never allow you another file an Offer in the future, even if your circumstances changed in the future and you became a great candidate.
You must use caution, and never file an Offer in Compromise unless you truly qualify for that solution or else you may be barred from every filing another one again.
I hope this important video tip has helped you understand the IRS a little better and about how tax problems are solved. Chances are you have questions or concerns about your own particular tax problem. What I encourage you to do is pick up the phone and call me. I can answer your questions. Over the past 20 years I’ve represented clients in all 50 states and 29 foreign countries, and I welcome your call. You can reach me at (888) 995-6785 or by email at firstname.lastname@example.org. I’m Jeff Fouts and thanks so much for watching. Have a wonderful day.