Offer in Compromise Candidate?

Technical topics regarding tax preparation.
#1
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I have a new MFJ client. They owed on their 2017, 2018, and 2020 tax returns. Total unpaid debt is 13K. Wife is disabled and gets social security income, hardly makes any income. Husband made decent income (70kish) prior to 2020 and a bulk of the tax is due to underwithholding. Basically they never updated their old W-4 forms once their kids dropped off their returns. Husband only made 25K in wages and 25K in unemployment for 2020. The husband is back to earning 70-80K in income, but with the wife being disabled I thought maybe it was worth a shot for an OIC. Obviously I know they are very situational and I'm probably omitting a few things that would anyone form a decision, but If I can help them out, I really want to.


Thanks!
 

#2
sjrcpa  
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An OIC would be considered based on ability to pay. Assets and income go into the calculation.
So , not enough info to tell.
Work through the 433-A (OIC).
 

#3
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The likelihood of anyone with the ability to work getting an OIC is close to nill. The likelihood of anyone w/ 70K of income getting an OIC is even less. The likelihood of anyone w/ $70K of income getting an OIC for a measly $13K in back taxes is zero.
Dave

Taxation is the price we pay for failing to build a civilized society. ~ Mark Skousen
 

#4
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I'd probably seek an installment payment arrangement before filing the OIC. But before doing so I would advise as to how to lower the monthly payment. Once that's done you're in a much better position to consider whether it would be worthwhile to file an OIC.
Steve
 

#5
CathysTaxes  
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A $13,000 tax bill is less than a new vehicle. IMO, an installment agreement is the best bet.
Cathy
CathysTaxes
 


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