IRS Does 180 on Offers in Compromise! “Pennies on the Dollar.” Is it Back?
The IRS has completely revamped its offer in compromise guidelines to greatly increase the number of taxpayers who will be able to qualify. Our tax attorneys will be revisiting many of the offers in compromise that are pending, and we recommend that all tax lawyers, enrolled agents, and CPAs who have clients who have submitted unsuccessful offers in compromise in the past review their clients’ current financial condition to see if they will qualify under the new offer in compromise guidelines.
The new guidelines are announced in a news release by the IRS (IR-2012-53, May 21, 2012). More details are available in Attachment 1 to Internal Revenue Manual (IRM) 5.8.5 Financial Analysis. The changes are dramatic! And like all tax law changes they are complicated and loaded with ambiguities.