My son did not pay his 941 taxes for 2 years and the IRS is after him.
 He did this when he was a sole proprietor.I want to make an offer in
compromise.  I have been to the IRS site, NOLO and others but have not
found what I want.

I want first person stories of their experience working with the IRS
and making an offer in compromise.  Not how to do it technically, but
real experiences.  I want 3 good ones - longer than 2 paragraphs and
with good insight and tips.

Hi EJ,

You want real cases about people owing payroll taxes.

OK. Names have been changed. The long stories are shortened.

Case 1 - George owed over $50,000 due to the death of a partner. 
The partner's company was supposed to pay the taxes. But Tom died
suddenly, and his new will, the one his own accountant knew about,
was nowhere to be found. So his estranged best friend inherited 
everything and didn't honor Tom's commitments. 

The "Trust Fund" portion of the debt (trust fund is the amount that
was withheld from employees) was about $35,000. George pretty much
had no assets. His car was leased. His apartment was rented. He was
president of his company, but it was just being built, so...there 
were no real assets. His salary was low. 

IRS settled with him for around $12,000. Their logic? 
George was marginally unhealthy, around 50 years old, 
no college education. Couldn't easily get another job
elsewhere. But he could pay off $12,000 over three years.

[Note: while you can bankrupt tax debt, you cannot bankrupt the 
"Trust Fund" penalty.]

Case 2 - Susan was in business for a couple of years. She had
only 2 employees. But she couldn't keep up with all the record-keeping
and budgeting. She got behind. The business wasn't that strong.
She didn't owe IRS all that much - only about $10,000. 
They would not accept the offer in compromise. 
She was young, healthy, perfectly capable of earning $10,000
over the next three to five years. They put her on an installment
agreement payable over three years. 

Case 3 - Candy owed about $30,000 plus penalties and interest by the
time she found out her partner wasn't paying the taxes. Her partner
took off. It didn't matter, she didn't have any assets anyway. Candy
had assets. She had equity in her house. IRS wouldn't accept the 
offer because Candy's was perfectly capable of getting a home equity
loan and paying it off. Their attitude was, so, you don't really owe it?
Go sue your partner. That's not our problem. You picked your partner. 
We didn't. 

Now if you want some information about what your son's chances are of
getting the offer approved, let me know:

How much does he owe?
How much are his assets are worth (after deducting loans)?
How old is he?
What level of school did he finish?
How marketable are his skills? 
How is his health?

I'll try to give you an idea of his chances and perhaps a direction
to take on the offer.

Best wishes,

Your TaxMama-ga

P.S. Currently IRS is very far behind on processing offers. 
They ARE responding quickly to the initial filing, sending out the
request for missing information withing about 60 days or less. 
But I am hearing from the Tax Pro community that offers are still
taking 12-18 months or more.

---

Clarification of Answer by taxmama-ga on 07 Oct 2003 08:59 PDT

Dear EJ

If you had asked for information on how to do it right, in detail,
I might have done that. Well, maybe not for $20.00....
People pay about $1200 for that kind of in-depth help.

I'd have given you a good enough overview, with links,
so you could handle it yourself. 

You asked about stories of people's experiences.
I gave you exactly what you requested. 

Best wishes

Your TaxMama-ga

I wanted detailed, lengthy examples giving advice re how to do it
right when working with the IRS. My question should have been more
precise.

9-15-2003

How much does he owe?  You can do a GOOGLE search using the phrase
"Offer In Compromise" and possibly find what you are looking for.  I
would also suggest that you or he consult a local attorney who
specializes in IRS Tax Resolution cases (you can usually find one with
that specialty or advertisement listed in the yellow pages) for
first-hand advice about how to do this--usually it is the best way to
go since in most cases they will let you negotiate for a reduced
amount.

4KEITH (I'm NOT a Google Researcher)
Accountant

Thank you; I have used google.