Is there a downside to filing an Offer in Compromise that I know will fail?
- June 27, 2019
- David Greene
- Comments Off on Is there a downside to filing an Offer in Compromise that I know will fail?
This is a question that has a simple answer and a correct answer. Yes you can file and appeal an Offer that you know probably will not be accepted. However, I do not do that for my clients. If I know my client will not qualify for an Offer, I seek other ways to solve his or her tax problem. Here is why. If you appeal the denial of your Offer to Tax Court and the court finds the appeal was for the purpose of delay, you can be fined up to $25,000. In fact, over the past several years taxpayers who filed frivolous appeals were fined over $150,000 by the Tax Court! Thus it is not a wise thing to do. I would like to talk to you about your situation. Many times, I am able to protect assets you think the IRS can take. Instead of making the determination yourself whether or not you qualify for an Offer, why not let a professional help you make that decision. Finally remember that the Offer process generally does indeed take about a year to complete and the IRS cannot take collection action against you during that time (with some exceptions) but the down side of that is that interest keeps accruing and the statute of limitations for collecting the tax is tolled (or stopped) during the time the Offer is being considered.