I hope you have managed to stay safe and well! We focus on resolving tax issues in Prince William County and throughout the lower Northern Virginia area.
It’s a good idea to remember to be at your most precise when calculating your OIC. That’s because minor mistakes can have major consequences for your OIC, causing confusion, and costly delays. And all too often they can just lead to outright rejection of your otherwise satisfactory offer.
Here are the most common mistakes made when preparing an Offer-In-Compromise:
- Making calculation errors on Form 433.
Form 433 requires a significant amount of less than rudimentary calculations, that can make some accountants think for a moment before proceeding. And you know if the math is incorrect in one portion of the form, the end result will be an incorrectly calculated OIC.
- Leaving blank spaces on any of the forms.
IRS Personnel have no way of knowing what is meant by blank spaces on either the Form 433 or Form 656. You may think that blank spaces denote to someone else, that the item is irrelevant, but it is highly recommended that you use “N/A” in those spaces, as opposed to leaving them blank.
- Writing Negative Equity.
Any asset with a negative equity must be reported on the appropriate forms as “zero”. The remaining amount owed over the property’s FMV is not taken into consideration.
- Forgetting to Justify your calculations with documentation.
Remember to justify your position by referencing corresponding documentation. The tie it all together with the citations from the Internal Revenue Manual (IRM), Internal Revenue Code (IRC) or adjudicated court case decisions. Root your arguments in the IRM, IRC to position yourself for a more favorable outcome.
- Allowing contradictory facts.
For instance, asking the IRS to accept less than what is owed on your tax debt, while, driving around in a new sports car, and living in a newly purchased million dollar home. If you have such a situation, you’d probably be better off saving your time (and money) by applying for an installment agreement or extension to pay.
- Relying too much on an emotional argument
The emotional argument should be more of an added remark, and not the main focus of your argument.
Keep in mind you will need to prepare the proper “Cash Flow” calculations in order to arrive at the conclusion. If you’re an entrepreneur you will need to perform the same calculations for your business and use the two calculations in conjunction with one another, in order to have an offer accepted.
We can perform the necessary calculations for you, and make sure that all applicable information has been taken into account. Please contact us to arrange for a convenient time to discuss your specific situation. We will handle your situation with the utmost professionalism. We’re to help when you need us.