Mistake #3: When dealing with the IRS /Minnesota Dept of Revenue

St. Louis Park MN

25 April, 2021

12:00 PM

Description

We have been highlighting common mistakes that taxpayers do when dealing with the IRS and Minnesota Department of Revenue. The number 1 and number 2 mistakes are “Not Filing a Tax Return” and “Not Appealing!”. Mistake #3 “Filing an Offer in Compromise (OIC) without doing the proper Financial Analysis”. I frequently represent clients in IRS examination and Collection cases in the Twin Cities, Minnesota. Most times, IRS/State usually denies most OIC because taxpayer thinks the IRS or State will accept any reasonable offer. The OIC is based on a specific formula, an upfront analysis needs to be done to make sure the taxpayer is a viable OIC candidate.  It makes no sense to file OIC offer without having an idea whether the OIC will be accepted or not. Nationally, less than 40% of the OIC offers submitted to the IRS get accepted mainly because the taxpayers/practitioners who filed the OIC offer do not know what they were doing! We understand you want the back taxes owed to IRS or Minnesota Department of Revenue gone, and an OIC sounds like a great solution.  However, you need to understand how the IRS/State conducts their OIC analysis. You want to make sure that you perform the same financial analysis that the IRS will conduct when evaluating your OIC. If ultimately you are not an OIC candidate, then it is best to save your time and money and focus on another IRS Collection alternative, such as an installment agreement, filing bankruptcy (in certain circumstances) or being deemed currently-not-collectable. If you have any questions regarding tax issues in Twin Cities, Minnesota ,do not hesitate to contact me at (612)516 5878 or by email at [email protected].