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Writers Criticize Proposed OIC Fee

SEP. 11, 2002

Writers Criticize Proposed OIC Fee

DATED SEP. 11, 2002
DOCUMENT ATTRIBUTES
  • Authors
    Braun, Michael W.
    Green, Patrick
    Skanes, Lisa
    Chadwick, Jennifer
  • Cross-Reference
    For a summary of REG-103777-02, see Tax Notes, Nov. 11, 2002, p.

    757;

    for the full text, see Doc 2002-24876 (4 original pages), 2002 TNT

    218-85 Database 'Tax Notes Today 2002', View '(Number', or H&D, Nov. 6, 2002, p. 1229.
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2002-26071 (8 original pages)
  • Tax Analysts Electronic Citation
    2002 TNT 235-18

From: postoffice@www.qai.irs.gov

 

Sent: Saturday, November 09, 2002 7:09 AM

 

To: guy.r.traynor@irscounsel.treas.gov

 

Subject: Comment from Web Site

 

From: mwbraun

 

reg=User Fee for Processing Offers to Compromise

 

category=taxregs

 

 

[1] I am a CPA with over 20 years experience in the tax area. I have worked with a number of taxpayers regarding offers in compromise. I believe the user fee proposal is a bad idea. Taxpayer's using the OIC process already have had their economic resources challenged. Adding a $150 user fee would be counter productive to the process. If a user fee were to apply I feel it should be to those offers that are based on doubt as to liability. In those cases the taxpayer has generally had the opportunity to challenge the liability already and for whatever reason did not do so or did not do so effectively. In those instances the IRS probably has to expend resources a second time on the same case, making the user fee more applicable.

[2] Further, the payment of a user fee does not do anything to improve the process. Although I have not submitted an OIC recently, IRS's history of processing prior applications has not been very good. If a user fee is to be applied to the OIC process, it should be done AFTER an approval is granted and not as a condition to such an approval.

Sincerely,

 

Michael W Braun, CPA

 

* * * * *

 

 

From: postoffice@www.qai.irs.gov

 

Sent: Wednesday, November 13, 2002 2:42 PM

 

To: guy.r.traynor@irscounsel.treas.gov

 

Subject: Comment from Web Site

 

From: pgreen

 

reg=User Fee for Processing Offers to Compromise

 

category=taxregs

 

 

[3] I am opposed to the proposed user fee for OIC. Generally these people are not wealthy, and usually cannot afford to pay all their current bills, which is why they are doing an OIC. I think the IRS should focus on settling for a reasonable amount, and encouraging taxpayers to stay in the tax system for the future. If the OIC program is being abused, I would rather see a different approach, such as stricter acceptance guidelines, or some other way to catch or deter abusers, while not fining poor taxpayers. Thank you.
Patrick Green, CPA

 

* * * * *

 

 

From: postoffice@www.qai.irs.gov

 

Sent: Monday, November 11, 2002 8:37 AM

 

To: guy.r.traynor@irscounsel.treas.gov

 

Subject: Comment from Web Site

 

From: lskanes

 

reg=User Fee for Processing Offers to Compromise

 

category=taxregs

 

 

[4] I am writing to comment on the proposed user fee for processing offers in compromise. It has been my experience as a CPA that those coming forward to request an offer are not able to pay the fee. Every offer that I have processed has been due to illness or financial hardship. They cannot pay their taxes, how are they supposed to pay a user fee? I think this fee would deter those taxpayers wishing to settle their tax liabilities.

[5] I think the IRS would benefit more from promoting those taxpayers to come forward voluntarily than trying to collect and charge a user fee.

[6] Also, it has been my experience that the processing of the offers by the IRS is extremely lengthy and the processing of a user fee is just another step in an already burdensome process.

Sincerely,

 

 

Lisa Skanes, CPA

 

* * * * *

 

 

From: postoffice@www.qai.irs.gov

 

Sent: Friday, November 08, 2002 5:44 PM

 

To: guy.r.traynor@irscounsel.treas.gov

 

Subject: Comment from Web Site

 

From: sjchad

 

reg=User Fee for Processing Offers to Compromise!

 

category=taxregs

 

 

[7] Most people that need to use OIC procedure don't have enough money to pay their bill. The whole point of the option is for the government to get part of the tax bill paid, but also to help people without adequate resources. Why charge them any user fee? It certainly doesn't cost the IRS much to process the paper work.

[8] These taxpayers are behaving conscientiously by attempting to put closure on their cases. They are keeping the IRS from having to go through lengthy procedures to get any money at all. They are saving the government money. Don't penalize them for taking some positive action.

Jennifer Chadwick MBA EA

 

* * * * *

 

 

From: postoffice@www.qai.irs.gov

 

Sent: Monday, November 11, 2002 9:32 AM

 

To: guy.r.traynor@irscounsel.treas.gov

 

Subject: Comment from Web Site

 

From: ssinger

 

reg=User Fee for Processing Offers to Compromise

 

category=taxregs

 

 

[9] I think this is a stupid idea. In the first place, the vast majority of people who need help and would qualify for an offer in compromise ("OIC") cannot afford to pay $150. They are living at, near, or below the poverty line and are already using their only available funds for important issues as feeding their children, medical care, housing, utilities, etc. In the second place, the costs to evaluate and investigate an OIC is part of the "service" that the IRS is supposed to perform. Although Congress drafted the law, there is no directive from them authorizing the IRS to charge such a fee. Third, I believe that imposition is counter-productive. You invite additional squabbles with taxpayer as to their ability to qualify. What remedy exists for the taxpayer who needs help with his unpaid tax bill, does not have $150 to waste with the IRS, does not qualify for exemption from the fee based on your criteria--are you going to deny OIC application because of a disagreement with the taxpayer as to his ability to pay a $150 fee.

 

* * * * *

 

 

From: postoffice@www.qai.irs.gov

 

Sent: Monday, November 11, 2002 9:09 AM

 

To: guy.r.traynor@irscounsel.treas.gov

 

Subject: Comment from Web Site

 

From: gilcalif

 

reg=User Fee for Processing Offers to Compromise

 

category=taxregs

 

 

[10] A fee to the taxpayer to process an OIC is not justified and is unreasonable. I am a VISTA and TCE volunteer who prepares approximately 150 tax returns for the low to middle income taxpayers. A small number of them have situations that require them to submit OIC to attempt to settle their required payments to the IRS. These OIC's generally come about due to financial situations such as a death of one of the spouses, large medical bills, business failures or similar unplanned situations. Most of these individuals are not below the established poverty level and under the proposed legislation would be required to pay a fee of $ 150.00 to get their OIC reviewed regardless if it is approved or denied. The Service should reconsider their proposed rule making and find other ways to offset the costs of their operation.

 

* * * * *

 

 

From: postoffice@www.qai.irs.gov

 

Sent: Saturday, November 16, 2002 4:03 PM

 

Subject: Comment from Web Site

 

From: ahinteg

 

reg=User Fee for Processing Offers to Compromise

 

category=taxregs

 

 

[11] I am not in favor of a fee for filing offer in compromises. My objection is based on the fact that if an individual is filing a compromise offer, they must not have much money to begin with. Asking a person to pay to have the collectibility of their debt evaluated is harsh and can be an even greater hardship for the person. I suggest you develop better ways to evaluate the collectiblity of a debt. Streamline the process by getting rid of un- necessary paper work and make the process more user friendly.

 

* * * * *

 

 

From: postoffice@www.qai.irs.gov

 

Sent: Monday, November 11, 2002 7:27 AM

 

To: guy.r.traynor@irscounsel.treas.gov

 

Subject: Comment from Web Site

 

From: smart

 

reg=User Fee for Processing offers to Compromise

 

category=taxregs

 

 

[12] I feel that charging a user fee would defeat some of the purpose of an OIC. I understand that there are abuses of the system, but I think it's unfair to charge fees to the taxpayers who are using the process correctly. If you do not have the money to pay your taxes I don't think by adding $150 as a fee would help matters any. Most of the OIC cases we handle in our firm a probono -- the taxpayers (do not even have money to pay a practitioner for the help they need. There must be someway to give the taxpayers who use the system correctly a break on the fee. Maybe giving them a credit against what they offer if the OIC is legitimate. In this way if the person is abusing the system you still keep the user fee. This will help defray the administrative costs of invalid OICs and may also help in reducing the abuse.
DOCUMENT ATTRIBUTES
  • Authors
    Braun, Michael W.
    Green, Patrick
    Skanes, Lisa
    Chadwick, Jennifer
  • Cross-Reference
    For a summary of REG-103777-02, see Tax Notes, Nov. 11, 2002, p.

    757;

    for the full text, see Doc 2002-24876 (4 original pages), 2002 TNT

    218-85 Database 'Tax Notes Today 2002', View '(Number', or H&D, Nov. 6, 2002, p. 1229.
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2002-26071 (8 original pages)
  • Tax Analysts Electronic Citation
    2002 TNT 235-18
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