Legal Question in Tax Law in Texas

Offer in Compromise

I was told by an attorney that the IRS can not legally consider an offer in compromise on the money my husband and I owe them because I have equity in my home. Is that true? We were audited and they say we owe around $35,000 in taxes, penalties and interest and we don't have the money to pay that. We have had a series of misfortunate events which have left us with ruined credit, so we can't refinance, and my husband and I can't sell our home because we work from there, and we would loose our income if we had to move. We also have 5 children living with us, so it would be difficult to find anything that would house us all anyway. Is there anything we can do to settle our debt for less with the IRS? The attorney we consulted said the only thing to do is to accept what they say, and make payments. HELP.


Asked on 9/16/08, 5:11 pm

1 Answer from Attorneys
Ronald Cappuccio Ronald J. Cappuccio, J.D., LL.M.(Tax)

Re: Offer in Compromise

An Offer In Compromise based on the inability to pay requires you to demonstrate the obligation to the IRS exceeds your assets. Since it appears you have equity in your home exceeding the amount owed to the IRS, you probably would not qualify for an Offer In Compromise.

An alternative would be to try to get an Installment Agreement. It sounds like your tax attorney is giving you good advice.

I hope this helps!

Ron Cappuccio

http://TaxEsq.com

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Answered on 9/16/08, 10:41 pm


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