Recent Client Stories of IRS Tax Settlements

OIC Offer Accepted for Snowmobile Accident Victim (12/06)

Donald M. contracted with FSI Tax for an OIC in May of 2006. Donald, a carpenter, and his wife, a part–time chef, fell into financial hardship after a snowmobiling accident left him unable to work. They had no assets, owned no real-estate and were struggling to support their three children.

By the time Donald came to FSI Tax, their income was $300 less than their monthly expenses. His total tax liability was approximately $19,000 when FSI submitted Donald’s offer. The IRS accepted his offer less than two months later for $1,129– a 5.9% settlement!

Special congratulations to Authorized Tax Representative Heather Thomas and Tax Case Manager Michelle Scott for all their hard work on this case.

$420,000 Tax Debt Settled for Elderly Woman in Just 7 Months (10/06)

Janice T. is a senior citizen who was burdened with a $420,000 tax liability. The debt was created 10 years earlier when Janice cashed out her 401(k) and did not pay the appropriate taxes on the early withdrawal. More than $160,000 of the tax debt was due to interest and penalties alone. Janice lives off of her Social Security benefits and wages from a fulltime job. She lives in a mobile home and owns no other assets.

FSI Tax settled her debt, one of their largest tax liabilities to date, in just seven months! All of the penalties, as well as the majority of the original tax debt, were effectively waived in the final settlement. Janice’s $420,000 tax debt was reduced to $24,089– a 5.7% settlement!

This low settlement resulted from our outstanding team at FSI Tax, specifically Tax Case Manager Michelle Scott and Authorized Taxpayer Representative Michael Smith, as well as the excellent cooperation we received from our client.

Tax Liability Reduced from $25,000 to $1,182 (12/06)

William W. is a delivery driver who pays child support payments to his ex-wife. His $25,000 tax liability resulted from being paid as an independent contractor and not filing his tax returns for 4 to 5 years. He is a homeowner, but had no equity in his home at the time. However, he receives tips and periodically deposits lump sums in his bank account, so the IRS wanted to consider these deposits part of his income.

William’s tax liability, FSI Tax’s second significant OIC in one month, was settled for 4.7% of the original tax liability. His $25,000 tax debt was successfully reduced to just $1,182!

FSI Tax successfully demonstrated to the IRS that the amount offered was the highest possible amount William was able to pay and that it was in the best interest of the IRS to accept the offer.

Special thanks to Tax Case Manager Michelle Scott and Authorized Taxpayer Representative Heather Thomas for their hard work on this case.

3.8% Settlement Secured for Low Income Taxpayer (4/06)

Many low income taxpayers end up indebted to the IRS because of under-withholding. Low-to-middle-income Americans consider income tax a burden because they do not want to give money to the government when they cannot afford immediate needs like food and rent. This was the case for Mark M., until he joined FSI Tax.

FSI Tax completed negotiations with the IRS for Mark in April for one of their lowest tax debt settlements to date: the IRS agreed to accept $1,204 to fully satisfy the $31,000 tax debt, a 3.8% settlement! The final settlement was based on many factors, such as Mark’s sporadic income, lack of tangible assets and expenses that included child support payments.

Mark still calls to thank his taxpayer representative to this day.