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Post by rmtvbrooks on Apr 19, 2011 9:58:15 GMT -5
Has anyone ever done an Offer in Compromise with the IRS? I'm looking for information on whether it is worth doing. Let me give you my situation in a nutshell:
Filed for divorce from my husband last fall due to him molesting our daughter. He committed suicide last month. He was also a financial idiot! One of the churches he worked for did not take out federal taxes, and he didn't send in quarterly like he should have. He also didn't pay it at tax time either. We had liens taken out against us. I am now responsible for paying them. He was supposed to be paying $500 a month on the payment agreement, but he even reneged on that. I had to renegotiate the payment agreement once he was arrested. I've been paying on it faithfully. We owe about $11,500 now. I'll be able to pay the whole thing once his truck is probated so I can sell it, but I wondered if it was worth doing an offer in compromise. Any feedback would be appreciated!
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rangerj
Junior Member
Joined: Jan 21, 2011 13:39:35 GMT -5
Posts: 242
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Post by rangerj on Apr 19, 2011 10:51:51 GMT -5
Before you try for an offer in compromise see a tax professional and look into the "innocent spouse" provision in the tax code. If you qualify for that provision you will not have to pay any of the remaining liability (his liability) even though you filed a joint return. If you are interested in this provision say so and we (forum regulars) can put this into the discussion "mix". In re. the original question, if you have the assets that you can sell to pay the debt the IRS is less likely to allow an offer in compromise. That is why I brought up the other possibility. Forum members, tax season is over so jump in here!!! ;D
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bookcrazychick
Initiate Member
Joined: Jan 7, 2011 22:48:42 GMT -5
Posts: 77
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Post by bookcrazychick on Apr 19, 2011 12:41:35 GMT -5
rangerj gave good advice. In my experience, the IRS will not accept an OIC if there is any indication you can pay it. We have had more luck with filing as an innocent spouse if applicable but that is not always easy either. I second consulting with a qualified CPA or tax attorney to assist you.
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Post by rmtvbrooks on Apr 19, 2011 14:20:18 GMT -5
I kind of had a feeling from what I was reading that an OIC wouldn't be a good option. However, I have a question about Innocent Spouse. Since he is deceased, wouldn't the debt have to be paid out of his estate? Since his estate consists only of his retirement account (which I already have as beneficiary) and his paid-for truck, wouldn't the IRS debt still have to be paid out of his estate, meager as it is? Which means I'd still have to pay it, even if I am granted Innocent Spouse relief?
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rangerj
Junior Member
Joined: Jan 21, 2011 13:39:35 GMT -5
Posts: 242
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Post by rangerj on Apr 19, 2011 19:09:51 GMT -5
Yes, IRS can look to his estate for payment. If you are the executrix of his estate be aware that if you distribute his assets without paying an outstanding tax debt you can be held liable via the "transferee liability" provisions of the tax code. "Innocent spouse" does not absolve you from paying his debt out of his funds/assets. If he has enough in the way of assets to pay his tax debt then by all means do that.
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Post by commentator on Apr 19, 2011 21:31:08 GMT -5
The IRS is not at all friendly when it comes to innocent spouse appeals. The IRS loses those cases which end up in Tax Court 90%+ of the time.
If you decide, after consulting with a local tax professional, to go that route, don't give the IRS another dime for the years you filed jointly with your late husband. If you do, you won't get it back even if you are found to qualify for innocent spouse relief.
On the other hand, pay your own current taxes on time and in full.
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mwcpa
Senior Member
Joined: Jan 7, 2011 6:35:43 GMT -5
Posts: 2,425
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Post by mwcpa on Apr 20, 2011 6:49:23 GMT -5
all good comments above.... Innocent spouse relief can be a difficult battle, so be sure to have your proof all lined up.....
but since his truck seems to be worth more than the debt owed the IRS will seek the net proceeds of that sale.... Innocent spouse may not be required....but if you take the proceeds to the sale of the truck for yourself do not expect IRS to play ball....
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Post by rmtvbrooks on Apr 20, 2011 15:11:14 GMT -5
Thanks to everyone for the feedback. It seems, based on the responses here and the other information I've found online, that I'm better to just pay the taxes from the sale of the truck and be done with it, especially since the amount owed is not excessive. I guess if I owed 6 figures, it might be different! I've been making monthly payments of $141, but it's really stressing my budget! I may talk to the IRS again and see if they can lower that payment. I'm hoping probate will be soon so I can be free to sell the truck and pay this off. It's an irritating reminder every month of the financial ineptitude of my former husband!
Thanks again for all the advice. It sounds like Innocent Spouse and OIC will be more hassle than they are worth for the amount of money we're talking about.
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Deleted
Joined: Nov 24, 2024 14:59:44 GMT -5
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Post by Deleted on May 3, 2011 9:42:22 GMT -5
Shouldn't Probate be paying those payments rather than you? Are you the executrix?
You shouldn't have to wait for probate to close to pay off the debt. Have the truck sold during probate and have them pay the debt with the proceeds. Are you working with an estate/probate atty?
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Post by rmtvbrooks on May 6, 2011 15:28:16 GMT -5
My attorney that was handling the divorce is now handling the probate for me. I haven't been named executor. He left no will, so everything will have to go through the court. It's complicated by the fact that I had filed for divorce prior to his death and we were not living together. I can't sell the truck because my name is not on the title.
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