How Offer in Compromise Works
Example – IRS Balance $200,000 |
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| A. Assets owned 150,000 20% reduction |
$150,000 $30,000 |
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| $120,000 | ||
| Debt Against Asset Value |
$115,000 $5,000 |
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| B. Monthly cash receipts Monthly living expenses |
$5,000 $4,000 |
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| Excess Cash Flow | $1,000 | |
| All liens released, condition, you must for five years keep all returns paid and obey tax rules. | ||
If you owe a balance to IRS, the service will settle in full for only a portion of the balance. Sounds to good to be true!
Here is how it works, IRS reviews the assets you own, amount owed on them, also your cash flow on a monthly basis. There are guidelines on amounts they will allow in this calculation; this is where our expertise will be a great value. Many times taxpayers are paying more mortgage payments for their state/county than IRS allows, this is an example of an adjustment IRS makes in your cash requirements paid out monthly.
IRS will settle with you for the value of asset, less debt against, reduced by 20%, plus monthly filers cash flow. Total of calculation is sum which will settle obligation in full. 20% of offer amount is paid with offer filing.
Plans
Cash Plan*
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Short Term Deferred
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Long Term Deferred
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