Offer In Compromise changes

7-9-2012
by roger chartier

In July 2012 taxes are still growing and waiting to be paid the following year if not quarterly by a business.

The "Offer In Compromise" or (OIC) deal that the government is offering to folks who can't come up with the money to pay in full has changed.

They've altered some rules to the "Fresh Start" program to be more helpful to who ever needs them.

It is not accepted when the IRS feels that you can pay the lump sum in full or by using a payment deal.

The IRS will look at what you have for assets and income to figure it out.

The IRS has something to say about it all:
Here are the OIC changes:

• Revising the calculation for a taxpayer’s future income The IRS will now look at only one year (instead of four years) of future income for offers paid in five or fewer months; and two years (instead of five years) of future income for offers paid in six to 24 months. All OICs must be paid in full within 24 months of the date the offer is accepted.
  
  
• Allowing taxpayers to repay their student loans Minimum payments on student loans guaranteed by the federal government will be allowed for the taxpayer’s post-high school education. Proof of payment must be provided.
  
  
• Allowing taxpayers to pay state and local delinquent taxes When a taxpayer owes delinquent federal and state or local taxes, and does not have the ability to fully pay the liabilities, monthly payments to state taxing authorities may be allowed in certain circumstances.
  
  
• Expanding the Allowable Living Expense allowance Standard allowances incorporate average expenses for basic necessities for citizens in similar geographic areas.
  
  These standards are used when evaluating installment agreement and offer-in-compromise requests.
  
  The National Standard miscellaneous allowance has been expanded. Taxpayers can use the allowance to cover expenses such as credit card payments and bank fees and charges.