Is This the Death of the Offer Program?

Five months ago, we told you that Congress was close to making to the Offer in Compromise program much more difficult for the average taxpayer. Fortunately, the provision of the bill which would have required a 20% down payment with any lump-sum Offer was killed.

However, just a couple days ago, we received email from the National Association of Enrolled Agents (NAEA) that the provision has been reborn and is “being considered for inclusion in either the budget reconciliation bill or as part of legislation to pay for hurricane relief, each of which is likely to be acted on in the near future”.

According to NAEA President Frank Degen in a letter dated September 29 sent to Congressman Jim Ramstad, Chairman of the Oversight Subcommittee, “if enacted, the proposal would require a taxpayer either to remit a 20 percent down payment with any lump sum offer or to make regular payment of proposed OIC installment payments while IRS considers the offer. Should IRS reject any offer, the agency would retain any monies remitted under this requirement. While the proposal would repeal the $150 OIC user fee, reduce time IRS has to accept an offer from 24 to 12 months (starting in 2010) and create a task force to review the entire OIC program, enrolled agents believe these benefits would be far outweighed by the so-called “good faith” provisions of the proposal”.

We strongly agree with Frank Degen and urge Congress to kill this bad proposed legislation. As Frank notes, “With IRS guaranteed monthly “good faith” payments, the provision may also actually have the affect of slowing, rather than speeding IRS’ OIC processing”.

There is absolutely no doubt whatsoever that if this is enacted into law, it WILL be the start of the death of the Offer in Compromise program. IRS Commissioner Mark Everson has shown he wants to kill the OIC program and this will, without any doubt whatsoever, be the start of that process.

We urge you to contact your House of Representatives member and Senator and urge them to kill this proposed legislation.