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I Make Too Much For An "Offer In Compromise" - Tax Resolution Institute

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Uploaded on Nov 1, 2010

Harry in New York asks Tax Resolution expert, Peter Stephan, if he makes too much to qualify for an offer in compromise and for options - http://www.taxresolutioninstitute.com.... For Tax Resolution help with tax problems, call (877) 829-8370 or visit http://www.taxresolutioninstitute.com

"From Harry In New York: I make too much to qualify for an offer in compromise. Do I have any options?"

That's an interesting question harry. Most people think that if they don't qualify for the offer in compromise program that the IRS has available to all taxpayers, that there is no other way out. Nothing could be further from the truth. What we do in a situation like that is we create what we call a Partial Installment Payment Agreement. What does that mean? Well, if you remember from my video Offer in compromises, they are gonna offer you a roof over your head, they are gonna allow you to drive your automobile, give you operating expenses, pay health insurance, court order payments, food and clothing and the like. In fact one of the things they are most gonna allow is the current income taxes. So you don't pyramid the liability. So, what happens when you don't qualify for an Offer in Compromise? We create a partial Installment Payment agreement. Well what the heck is that you might ask? Why is that different from an installment agreement? What we do at the tax resolution institute is that we analyze the IRS transcripts, and we determine, what the collection statute is and when it expires. The IRS has ten years to collect the income tax under normal circumstances. Lets say that you're three or four or five years into the ten‐year statute and we calculate your disposable income, which is the amount the IRS expects to be paid either based on national and local standards or your actual expenses and we start paying them, lets just call it for conversation's sake 1000 or 2000 a month against a 100,000, 200,000 or 500,000 dollar liability. You pay until the end of the statue. Once the 10 years, expires, you don't owe the tax anymore because the collection statute has expired. That's what I call a Back‐door offer in compromise; the official term is a Partial Pay Installment Agreement, a PPIA if you're talking to a revenue officer. That's how you solve the problem of having too much income and not qualifying for an offer, I call it going through the front door.

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