Eli Posted May 4, 2007 Report Share Posted May 4, 2007 in 2004, single female claimed 2 children that belonged to a friend of hers. Due to that, she now owes IRS $6001.38 including interest & penalties. In 2006 she claimed 1 child that did not belong to her. The EIC portion of that refund was frozen, but she still owes $1138.97 for 2006. The total amount due is $7140.35. She has a job (minimum wage). She is single & lives with her parents. WOuld this be a situation that might qualify for an OIC?? I'm not sure that I would even try to initiate this for her, but want to at least try to give her a bit of advice. Thanks! Eli Quote Link to comment Share on other sites More sharing options...
jainen Posted May 4, 2007 Report Share Posted May 4, 2007 >>Would this be a situation that might qualify for an OIC??<< Assuming she could not show any doubt as to liability, eligibility for an Offer in Compromise is based on her ability to pay. Considering her age, physical condition, job skills, and other factors, can she demonstrate that she has no assets or expectation of income? The IRS generally looks forward for five years to determine the possibility of collections, although their statute of limitations is at least ten years (and filing the OIC will significantly extend the statute). A problem for you as the professional is that developing a valid offer takes twenty to thirty hours of work, so how can she pay you? Quote Link to comment Share on other sites More sharing options...
joanmcq Posted May 4, 2007 Report Share Posted May 4, 2007 She scammed once, got caught, and then tried the scam again? I have no sympathy. Besides, it also seems like she has no expenses. No expenses = ability to pay. Its only about $120/month.... Quote Link to comment Share on other sites More sharing options...
Eli Posted May 4, 2007 Author Report Share Posted May 4, 2007 She scammed once, got caught, and then tried the scam again? I have no sympathy. Besides, it also seems like she has no expenses. No expenses = ability to pay. Its only about $120/month.... I really don't feel sorry for her either. I've never done an OIC and this will not be my first. As Jainen says, she probably would not have the money to pay for it or might just not want to. $120.00 a month should not be too bad. Would this be with or without the OIC? Thank you both for your responses!! Eli Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted May 4, 2007 Report Share Posted May 4, 2007 I agree with Joan, this one is not a candidate for OIC at all. She owes way too little to even consider wasting time on doing an OIC. Let her pay the tax in installments, and warn her very clearly that is she tries that scam again, she is a VERY LIKELY CANIDATE for being charged CRIMINALLY. Although they do not do it often, they DO like to do it a few times each year, just as a warning and 'bad example' to others. And when they do, they like to use someone who has already been warned, and still did it again, so that the 'criminal' does not get much sympathy from the general population. She sounds like a prime candidate, should she do it again. In fact, since she did it in 07, for the 06 Tax year, she's not in the clear yet. So she better make her payments on time, and behave, or she could be in real trouble soon. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted May 4, 2007 Report Share Posted May 4, 2007 That would be without any OIC. Quote Link to comment Share on other sites More sharing options...
Eli Posted May 4, 2007 Author Report Share Posted May 4, 2007 That would be without any OIC. Thank you, KC!! I'll let her know. I guess then maybe I can set up an installment plan for her and at least charge her for that :-) Eli Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted May 4, 2007 Report Share Posted May 4, 2007 Yes, set it up and make it for the total owed divided by no more than 50, so that it will pay out in at least 5 years. That allows for the interest they will keep charging. And make sure she knows that she has to keep her nose clean for that whole time. Quote Link to comment Share on other sites More sharing options...
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