Insurance World

I am a former IRS Agent who has worked and taught the "Offer-in-Compromise" Program in the IRS Regional Training Center. The Offer-in-Compromise is a much talked about program and advertised as "pennies on the dollar" settlement.

FACTS: Approximately 52,000 "Offer-in-Compromise" (hereafter referred to as OIC) are filed each year and that number will be rising at a record pace. 12,000 OIC are accepted each year. The program has an acceptance rate of about 22%.

OICs are worked only by an IRS Tax Specialist whose expertise is OIC. All the tax specialists are trained to scrutinize the OICs. I bite my tongue in saying this; it is my firm belief that the Agents working these cases look first to reject rather than to accept an OIC. Why, simply because it is far less work for an Agent. It is much easier to send a rejection letter than fully document the case for acceptance. Therefore the Agents look for any reason they can use to reject the OIC. An OIC rejection closes out their inventory quickly, making the Agent look very efficient in managing their case load.

The Key to having your OIC accepted is listed below:

1. Fully document the case. Get every piece of paper you can, verify every number you put on the Form 433A, the IRS financial statement.

2. Keep up with the OIC. As soon as the case is assigned, call the Agent every two weeks to ask for an update. This lets the Agent know you really want this pushed through and that you can furnish additional documents if needed. Most Agents will not even contact the Taxpayers or their representative, they will usually just send out a rejection letter. It is the easy way out.

3. Make sure the case makes sense. If you believe the Agent will have questions, send in an additional statement the clarify questions you think will arise.

4. Know that IRS will look at the history of the taxpayer and income levels for the last five years. If there have been major fluctuations in your income level, please document the fluctuations in detail.

5. Believe it or not, many offers are rejected because payments were not attached or the OIC was not signed. To avoid a rejection, you should have a tax professional review the OIC before submitting.

I have been in this business a number of years and truly believe you would be a fool not to have professional representation. Find a professional tax firm specializing in OIC, which is your very best chance of having the OIC accepted.

Former IRS Agents who have worked the Program are best suited for this job; after all, they know the tax policies.

Michael D. Sullivan is a seasoned IRS tax expert. Learn more about Michael and the services he provides at http://www.freshstarttax.com/.

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With economic turmoil swirling the US these days, the topic of bankruptcy and debt settlement are on the tips of almost everyone's tongue. Just turn on the TV or listen to the radio during drive time and you will see and hear these advertisements from debt settlement companies with grandiose claims. What do you do when you're buried under a mountain of debt? Do you believe the claims that you hear in the commercials or do you go consult a bankruptcy attorney and file for bankruptcy? The debt settlement companies claim that the debtor's credit will not be ruined as it would in a bankruptcy filing. Some of the claims seem too good to be true.

I picked up the phone the other day and there was a telephone dialer playing an ad for a debt consolidation company. The ad started out asking if you are drowning in debt, we can help you. We know all the top-secret information that your creditors don't want you to know. It continued on saying that they could set up a payment plan that would drastically reduce the minimum payment along with the total amount owed. And when they really lost me was when they claimed that they were a nonprofit company and had successfully eliminated millions of dollars in debt in the last year. It doesn't take a rocket scientist to realize that these claims are false.

Debt consolidation and debt settlement is looked at by the Federal Trade Commission similarly to the credit repair business. Not to ding all of them, there honestly are a few that try to do what they say. The ones you have to worry about are the ones that get shut down by the FTC and pop up using a different name. This kind of shady practice has been going on with the do-it-yourself online bankruptcy companies also. Many of these scammers prey on desperate consumers who are looking for an easy way out with their financial problems. And as you know, nothing comes that easy.

There definitely is an allure to these debt consolidation companies that make these extravagant promises. Many individuals having financial troubles have fear of filing bankruptcy and can be easily talked in to an alternative to find a way out of their debt. Debt consolidation companies want to make people think that they are doing the right thing by paying a portion of their debt back. They also make claims that because they are paying a portion of their debt back their credit will not be damaged. Most of the time when a debtor completes a debt settlement the creditor reports it as a charge-off. These stay on the debtor's credit report for seven years. With this in mind, bankruptcy is starting to sound better and better.

Being in debt can be stressful, but there is a way out. It took some time to get into debt and it will take a little more time to get out. Filing bankruptcy gives the power of the US court system stopping creditors from collection attempts immediately after filing. Considering this alone, debtors get a chance to breathe and not worry about looking over their shoulder anymore. Depending on the amount of debt an individual is carrying, it's best to check all your options including a consultation with a bankruptcy attorney. You'll never know unless you weigh all the pros and cons of all options.

The author started FilingBankruptcyNow.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.

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