Offer in Compromise - Goes to Court

Offer in Compromise - Goes to Court
On Nov. 1, the United States Tax Court handed down another defeat for a pro se taxpayer challenging the collection action of the commissioner. In Wilcox vs Commissioner, T. C. Memo 2005-257 the Tax Court held that the taxpayers vague suggestion of an offer in compromise was not enough to find that the denial of relief at a CDP hearing was an abuse of discretion.

A taxpayer who timely requests a CDP hearing and submits an offer in compromise at that hearing is entitled to challenge the denial of the offer in compromise in Tax Court ( or U. S. District Court if employment taxes are involved.) Wilcox acting pro se was just not savvy enough to have submitted a properly filled out form 433A or Form 656 Offer in Compromise. You can find the full text of the case at my website Offersecretsrevealed.com

Offer in compromise numbers down for 2004

Offer in Compromise Numbers Down. The number of IRS Offers in Compromise received by the IRS sharply decline.

The year 2004 saw a sharp decline the number of offers in compromise received by the IRS. In 2001 the IRS receive 125,000 offers in comprimise from people trying to get tax debt relief. That number declined to 124,000 in 2002. The number of offers in compromise increased again in 2003 with over 128,000 taxpayers seeking IRS tax help in solving their tax debt. However, 2004 saw a serious drop in the number of people seeking a tax debt settlement by submitting an offer in compromise. Only 106,000 people tried to get tax debt relief and solve their IRS problems by submitting an offer in compromise.
This should be contrasted with the number of delinquency investigations conducted by the IRS in 2004 which was up by 38% over the 2003 numbers. The numbers seem to suggest that the automated IRS Levy is one of the new primary collection tools. As the automated collection centers continue to grow and the field activities continue to decline. The automated bank levy and wage levy seems to be the front line of the collection activities the IRS is using to collect IRS tax debt. IRS levies rose over 20% with an additional 348,769 levies being issues in 2004 over the amount issued in 2005.
My guess is that number will not increase to much in 2005 because of Hurricane Katrina. The IRS has decided not to issue a bank levy or a wage levy on any taxpayer who lives in a disaster area and was affected by the hurricane. The disaster area includes the entire State of Louisiana, most of Mississippi, and big chunks of Alabama and Florida. This moratorium on use of the IRS levy will be in effect until February 28th, 2006