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Offer in Compromise Denied

                                    Who Cares?

Bankruptcy may be the better alternative anyway!

What is an Offer in Compromise?

An Offer in Compromise is an agreement between the taxpayer and the government that settles a tax liability for payment of less than the full amount owed.   The Internal Revenue Service will generally accept an Offer in Compromise when it is unlikely that the tax liability can be collected in full and the amount offered reasonably reflects collection potential.   It is not simply a number picked out of the air or “pennies on the dollar”.   The process of determination is rigorous and driven by a mathematical procedure to minimize frivolous offers.   Do not be taken in by advertisements that claim that tax debts can be settled for “pennies on the dollar”.   While it may be true, it is the result of the math.

How can bankruptcy be a better alternative than an Offer in Compromise?

Your first step in deciding whether to pursue an Offer in Compromise or a Chapter 13 bankruptcy is to estimate what the IRS terms your “Reasonable Collection Potential” (RCP).   The simplistic definition of the Reasonable Collection Potential, in essence, is what the IRS reasonably and potentially could expect to collect from you from the attachment of your wages and income as well as from the seizure of your assets in order to settle the tax assessment against you. It equals your Realizable Value (RV) of all of your assets after paying off the Loan Balance (LB) remaining on any asset plus typically four to five years (depending upon the terms of your offer) of Disposal Income (DI), which equals Monthly Income (MI) less Necessary Living Expenses (NLE).   The Internal Revenue Service expects you to liquidate assets, obtain interest bearing debt from lending institutions on your equity in your assets,  borrowing funds from family members, and/or friends.  In addition to offering your equity in all of your assets, the IRS ordinarily requires 4 or 5 years (contingent upon the payment terms of your offer, theoretically up to 10 years) of monthly installment payments of an amount representing your monthly disposable income.

NOW WHAT ABOUT CHAPTER 13 BANKRUPTCY

The Internal Revenue Service does not tell you about the federal bankruptcy laws that were created to protect you in tax situations, that cause you deep emotional stress over Big Brother levying your wages, seizing your property, and leave you with too little money to meet your other many bills you need to pay.   

The filing of a Chapter 13 bankruptcy creates an “automatic stay” that will stop tax levies and the seizure of your property and require the IRS to comply with your Chapter 13 repayment plan.  Your monthly Chapter 13 Plan payment will need to be enough over 3-5 years to pay the amount the IRS is entitled to receive in a Chapter 13 bankruptcy (priority tax debt and secured tax liens).    Unlike the Offer in Compromise, Chapter 13 bankruptcy does not contemplate the liquidation of assets.   It contemplates that the Chapter 13 bankruptcy will be funded by future income. 

How do I get started?   

Steven P. Taylor, P.C. | Kokomo and Indianapolis Chapter 13 Bankruptcy Lawyer

The first step in the process is finding an experienced bankruptcy attorney and potentially, a certified public accountant.   Please understand that this area of bankruptcy may require appropriate professional advice from a certified public accountant to make an informed decision.   I  understand that for many clients, Saturdays are the only days they have off, so I will make myself available. I welcome the opportunity to meet with you to talk to you about your situation at no charge. More than anything, I look forward to helping clients get a fresh start so that they can start living their lives again.

Contact the law firm of Steven P. Taylor, P.C. today in his Indianapolis bankruptcy office at (317) 271-1111 or in his Kokomo bankruptcy office  (765) 868-0807 for a free consultation about whether you should file for Chapter 13 bankruptcy to stop the IRS in Indiana or email us your questions.  Steven P. Taylor will assist you in determining whether a Chapter 13 bankruptcy is the best path for you, and will guide you through the bankruptcy process

Download Initial Intake and Disclosure Forms 

Download Required Document Checklist and Budget Worksheet

Prior to your first meeting with my office, please complete the above downloads. They can provide me with further insight into your financial situation and allow me to determine if Chapter 13 bankruptcy is appropriate for you.

 

My practice serves individuals throughout Indiana, including Bartholomew, Boone, Brown, Carroll, Cass, Clinton., Delaware, Grant, Hamilton, Hancock, Hendricks, Howard, Johnson, Madison, Marion , Miami, Monroe, Montgomery, Morgan, Shelby, and Tipton county as well as the municipalities of Columbus,  Lebanon,  Zionsville,  Nashville, Galveston, Frankfort, Muncie, Gas City, Marion, Carmel, Cicero,  Fishers,  Noblesville, Sheridan, Westfield, Fortville, Greenfield, McCordsville, New Palestine, Avon, Brownsburg, Danville, Plainfield, Greensboro,  New Castle, Spiceland , Greentown, Hemlock, Kokomo, Russiaville, Franklin, Greenwood,  Nineveh, Trafalgar, Whiteland, Alexandria, Anderson, Elwood, Beech Grove, Camby, Castleton, Indianapolis, Lawrence, Speedway, Amboy, Bunker Hill, Converse, Miami, Peru, Bloomington, Crawfordsville Martinsville, Mooresville and Paragon.


We are a debt relief agency. OUR DEBT RELIEF LAWYERS help people file for bankruptcy under the united States bankruptcy code. IF YOU NEED DEBT RELIEF, OUR LAWYERS ARE READY TO HELP.

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