Tue, Jul. 03, 2012 Posted: 10:28 AM
Duluth/Gwinnett CPA: Submitting an Offer in Compromise by Utilizing a Offer Cover Letter
Having served as a Gwinnett County CPA for decades, I have learned that anticipating questions before they are asked by the IRS, knowing what to expect and developing both reasonable expectations with both the Internal Revenue Service and a client are essential to successful dealings towards handling IRS tax representation issues and tax advocacy. When the IRS heightens their collection efforts, it is usually one of the predominant factors in helping taxpayers realize the importance of the needs to quickly address open tax issues that are getting higher as additional penalties and interest are incurred. Also the added impact of the IRS enforced collection efforts assist in heightening a taxpayers financial sensitivity as tax liens affect their credit and ability to handle their business and personal affairs, tax levies seize bank account monies, and garnishment affect both W-2 wages and independent contractor income. Below is sample letter one might use when submitting an Offer in Compromise to the IRS:
Internal Revenue Service
Enclosures: Power of Attorney, Form 656, Checks, Form's Form 433A and all related attachments
Dear Sir or Madam,
I am sending this to you in a good faith attempt to come to terms over the above taxpayers' present predicament and to submit an Offer in Compromise on their behalf. I am willing/eager to supply you with any information that you might need in order to process the Offer.
The taxpayers have advised me that they have filed all of their presently due tax returns. I believe that this shows they want to continue as taxpaying citizens and to begin actively paying taxes as they are owed. Please note I have enclosed copies of where they recently paid the IRS an estimated tax payment of $5,000 to bring their current tax payments current. Please note the taxpayer on September 1, 2012 incorporated their business as ABC Company, Inc. and has retained a payroll service to ensure that their withholding taxes are paid as they become due.
In an effort to help in their efforts to return to compliance. Since I have assumed the role as their financial advisor (they had no advisor previously), I have consulted with them, and in good faith I would like to make and Offer in Compromise for the taxpayers to pay as much of the balance of the tax liability as they possibly can.
As they have no substantive liquid assets, I have suggested that they borrow as much as possible from their friends and relatives. With great difficulty, they have arranged to borrow an amount that exceeds their personal net worth. They have arranged to borrow these funds after the acceptance of their Offer in Compromise. These monies would otherwise not be available as evidenced by the enclosed forms. Therefore, I believe this to be a fair and reasonable offer.
Note that I have advised the taxpayers that after the acceptance of their Offer that they must stay in compliance by keeping all of their filings and payments current for five years. They have further been advised that in the event they do no maintain the above that the previously accepted offer would be voided and the previously abated monies would be reinstated and collection efforts resumed.
I request that all collection efforts be stopped while this Offer is being resubmitted. Please accept this Offer in Compromise as submitted.
To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html
Duluth/Gwinnett CPA: Income Tax Preparation, Financial Statements & IRS Representation
Provided by John Dillard is an Christian Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ HisCPA: A Christian CPA Firm in Duluth GA Proudly Serving Suwanee, Lawrenceville, Snellville, Lilburn, Duluth, Norcross, Peachtree Corners, Atlanta, Gwinnett, Fulton, Johns Creek, Roswell, Forsyth, Flowery Branch, Buford, Cumming, Dunwoody, Alpharetta, Dunwoody, Sandy Springs and Tucker as a Faith Based CPA Firm