Offers in Compromise Save Couple Over Half Million Dollars
When a California couple hired Omni, their business had accrued a federal tax liability of over $300,000 and a California tax liability of over $277,000. They also owed the State Board of Equalization $201,000 and the Employment Development Department $76,000, bringing their debt total to $854,000.
Omni Financial quickly submitted an Offer in Compromise with the State Board of Equalization for $6,000. After continuous negotiations and numerous appeals, the Offer In Compromise was accepted, saving the couple $195,000. They also submitted the Employment Development Department an Offer for $6,000. That Offer was also accepted, saving $70,000.
Omni then filed an Offer in Compromise with the IRS. When the IRS responded to the Offer request, the biggest issue they raised was the fact that the couple sold their home and used the funds to invest in their corporation. The IRS considered this a dissipated asset. At that time, the couple did not have a personal tax liability, and there were no liens in place under their Social Security Numbers. When the trust fund recovery penalty was assessed in 2004, the couple did not own any real estate or hold title to any other assets. After nearly a year of going back and forth, Omni was able to persuade the IRS to drop this argument.
Another argument raised by the IRS was imputation of Social Security benefits to the husband, as he was over the normal retirement age. Omni was able to counter this by showing additional medical expenses and tax liabilities that would offset this additional income.
Through continuous negotiations and numerous appeals hearings, Omni was able to get the Offer accepted for $10,000, a total savings with the IRS of over $298,000. The couple ended up saving a total of $564,000.
