Omni Persistence Saves Client over $90,000 in Back Taxes
A client who was originally from Australia came to Omni for help with his tax debt of $132,114 that he had accrued between 1994 and 2002. His quickly-growing debt was partially due to the fact that he neglected to carefully review United States tax laws.
Since 2003, the client had worked with several tax resolution firms as well as tax professionals that couldn’t get the job done. The last tax attorney that he was involved with used to be part of the Internal Revenue Service. That attorney turned down a $48,000 Offer in Compromise from the IRS, and the file went back to collections to begin enforced collection.
The client came to Omni with a wage garnishment of $1,585 per month that he desperately wanted released. He also wanted to file a new Offer in Compromise, and stated he would be willing to go to the maximum payment amount of $65,000.
The Offer in Compromise was sent to the client for $32,677, based on the equity in his home, automobile, a dirt bike and small bank account balances. The Offer in Compromise was submitted to the IRS on behalf of the taxpayer.
When the IRS looked at the Offer and the client’s financial situation, they requested information including general income and expense substantiation, as well as additional information about large wires and deposits into their bank account. During the investigation there were several “strange” deposits of large dollar amounts into the bank accounts. Omni explained these to the IRS as loans from the client’s employer to make ends meet during the difficult times. He also received money from his parents in New Zealand during the Offer in Compromise to pay for his children’s private school education. The initial examiner would not accept these explanations and wanted to add the deposits as income.
The required information was submitted to the COIC Unit and despite the submission of documentation, the Offer in Compromise was closed out by the Offer examiner due to belief the taxpayer could full pay the liability. The client was upset because his home had appraised at $285,000 rather than what he believed to be the value (tax assessed value of $195,000). The examiner refused to look at tax appraised value, since the market value was much greater. The Offer in Compromise was to be formally rejected and Omni decided to appeal.
On February 1, the Offer in Compromise was re-entered into the IRS system. Upon review by the lead examiner, it was again brought up that the deposits into the bank account were not matching what the client had stated as income on the 433-A, and they were going to include this as income. After many discussions, the examiner agreed to allow these deposits/withdrawals and not include them as income as long as Omni could provide one current month’s bank statement “proving” income was what the client said it was.
However, during this time, the client’s grandfather had passed away and his family again had wired a large sum of money into his account so that he could fly his family to New Zealand for the funeral. Again, Omni could not prove deposits matched what was stated as income and the examiner was determined the client could pay the full liability. In response, Omni sent over verification of the grandfather’s death, proof of the wire and plane tickets purchased for the funeral. Family members also provided a notarized statement saying that they had loaned the client money to make ends meet.
On February 6, the Lead Offer Examiner indicated that he would be rejecting the Offer. Omni countered by submitting additional arguments regarding his conclusions. After several weeks of reviewing those arguments, the Lead Offer Examiner finally determined that the IRS did not need to reject the offer. Based on Omni’s arguments, compliance with requests, the length of time that had passed since the original submission of the Offer in Compromise and the response times by the Agents working the Offer, the manager decided to accept both Offers for the original amount submitted.
On April 4, the Offer in Compromise was officially accepted. Remaining payments of $21,958 and $4,183 were to be made within 90 days of acceptance.
When the client was trying to pay the Offer in Compromise, he realized that his employer had made an error while collecting his wage garnishments of $1,585 every month, and that none of those payments had actually been sent to the IRS. Throughout the whole proceedings, the wage garnishment was never released, and the employer was left holding about $20,000. The client got these funds, and used them to help pay off his Offer in Compromise. He finally settled his tax debt in September, releasing all his leans.
Due to Omni’s unrelenting arguments, and unwillingness to accept that this client could pay the entire debt, the client ended up saving over $90,000.
