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A lot of my Mesa, Arizona, Gilbert Arizona tax clients are considering an IRS offer and compromise.
And, like I say all the time, the IRS offer and compromise for someone with serious tax debt
is really the gold at the end of the road if you can make it work.
Most people can't, but there's some ways you can increase the odds that it will work.
One of the things you have to be aware of when doing an offer and compromise is that you have to make sure that you're being honest with the IRS.
The IRS has all sorts of secret ways to find out what you own, what you've transferred to other people, if anything,
and your tax lawyer will tell you, and I will tell you, that you have to disclose everything to me
because they will figure out if we haven't disclosed something,
and that will kill your offer and compromise even if from a numbers standpoint it was a good offer.
So, the number one rule is to make sure that you're disclosing everything, that we know everything before we submit it off.
Or sometimes if there's a problem, there's ways to plan around it. We just need to know what it is.
Another good thing to remember, and this is probably basic but a lot of people miss it is, you can't file the offer unless your returns are filed.
If your returns aren't filed, if they're showing a missing return,
they'll just send the offer back to you, and tell you to try again or ignore you altogether.
A little bit lesser known issue and one that we kind of focus on is,
it's probably a good idea when you do an offer and compromise to determine first whether the debt,
tax debt or some of it is dischargeable in the Chapter 7 or Chapter 13 bankruptcy.
The IRS is required to at least consider the fact that the debt might be dischargeable in bankruptcy,
and I think that a lot of times it's a really heavy, a good factor that plays in your favor, if you're filing an offer and compromise.
Most tax lawyers, most tax outfits don't consider the advantages of bankruptcy in this type of situation,
because it requires you actually to put a bankruptcy case together,
and unless you've done lots of bankruptcies and you know what you're doing, that's not an easy thing to do.
But that's another good tip, is to make sure that if you are a candidate for bankruptcy in terms of getting rid of tax,
that that's figured out first before you do the offer, so that you can use that as an argument.