The Risks in Submitting Your Own Offer

An Settle IRS is prepared and submitted as instructed in the new 48 page set of instructions and forms.  (You will need the Adobe Acrobat Reader to view these documents). Supporting documentation must now be supplied with the original submission.

Based on the submission, the IRS will determine if the Settle IRS is "PROCESSIBLE"  If it is not processible it will be returned to the preparer so indicated. This does not mean it has been rejected.  It only means that it must be reviewed and corrected to bring it to a processible state.  Processible means it appears on the surface that an offer might be possible.

IRS personnel will then put your offer in the hopper for investigation.  This means that one day in the future from 60 days to 5 years later, the IRS will want to discuss, investigate, negotiate and try to kill your offer.  Remember, IRS personnel are enforcement officers, THEY CANNOT BE YOUR FRIEND.

If the IRS is dealing directly with a taxpayer, the taxpayer is at the mercy of the particular offer specialist at the IRS as to whether or not they will give the taxpayer a break.  The taxpayer, being naturally nervous and apprehensive, will undoubtedly make many mistakes in pushing his own case with the IRS.  Remember, if you say it, or even if the IRS thinks you say it, you are stuck with it.  That is why so much of the communication with the IRS Offer Specialist MUST BE IN WRITING, CHECKED, DOUBLE CHECKED, AND CHECKED ONCE MORE. The impact of the answer must be fully understood by the taxpayer or representative.  There are countless tricks and traps to blow an offer out of the water. 

For example, a call comes in from the IRS:  "Just have a few questions to finalize this offer.  Say, did you get a raise last year? How much?  Your wife? (Combined increases of $120 per month on gross W-2 income of $3,600 per month) Wow, that was a nice increase.  Thanks, that's all I need."

Two weeks later a rejection letter comes from the nice man stating:  "Sorry, but we cannot accept your Settle IRS due to the high probability of future increases in income." 

Ok, you're the taxpayer negotiating your own offer.  What do you do now?