i owe for tax years 2003, 2004, 2007, 2011
For the federal govt and irs most likely fill out form 433A-OIC; someone from your state or the DOR in your state can advise you better on the state issue.
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4 lawyers agree
Real Estate Attorney
Use find a lawyer for a tax attorney. Or qualified CPA or enrolled agent to evaluate your taxes and assist you accordingly. Good luck to you.
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Use the "Find A Lawyer" function on AVVO to find a tax attorney near you. There are many, many companies that handle Offer in Compromise applications based in California. Some are good, some are not as good. A word of caution is that this area of tax law is filled with salesmen who will tell you anything you want to hear to get you to sign up.
No tax professional can be sure whether you qualify for an Offer in Compromise without collecting a great deal of financial documentation. The IRS looks at your income, expenses, and assets to determine what they could collect from you through garnishments, levies and seizures of property. They formulate this data into what they call your "Reasonable Collection Potential." If your offer is fairly close to the number they've calculated based on the documents you provide, the IRS will accept your Offer.
The California Franchise Tax Board is quite a bit more aggressive. Along with your financial information, they also factor in your future earnings potential, which is not as concrete a concept as one would like. No matter who you work with, I would expect the State of California to be more rigid than the IRS. My company will provide a free consultation (as will many other qualified tax professionals), but I would start by looking in your area for someone you can trust offering a fee structure you can afford. Best of luck!
Robert Hoffman is a tax attorney licensed in California. The information presented here is general in nature and is not intended as a substitute for legal advice. This posting does not create any attorney-client relationship with the author. For competent advice about your particular situation, consult your own attorney.
You can probably fill out the OIC forms yourself because most of the work involves filling out a financial statement and sending both the IRS and FTB various documents like banking records, real estate statements, etc. But a tax attorney that specializes in Controversy work is your best bet as he or she will be able to negotiate the settlement amount on your behalf. You want someone that is very experienced at doing OICs or Settlements.
I agree with Mr. Ashouri's answer that you should consult with a tax attorney, CPA or enrolled agent experienced in making offers in compromise. Tax professionals should be update on the current rules governing making these offers so you can be advised as to making an appropriate offer and the probability of success. Also, if it appears based on your financial information and assets that you can pay the taxes, they can advise you as to the other payment methods.
Whether you or a tax professional prepares the offer, don't expect a miracle. If the IRS and FTB believe based upon your income and assets that they can collect what you owe, they won't compromise. However, since new federal rules governing offers in compromise were put into effect in 2012, the IRS is approving a greater percentage of OIC's and with better terms for the tax payer.
Below are links to the California's FTB webpage on Offers in Compromise and the IRS webpage on Offers in Compromise. Each has valuable information as to Offers and links to the forms needed to make an offer. I would recommend trying to resolve California first, as the FTB can be very aggressive and difficult to work with, and if you are required to make payments on your past due taxes the IRS will take this into consideration when determining your ability to pay your federal past due taxes.
Finally, if any of the taxes you owe were for years that you didn't file a return, but the taxing authority prepared a return for you (commonly know as a "substitute for return" or a "substituted return'), have that substituted return checked to see if you would owe less if you filed your own return. The substituted returns are often wrong.
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There are many attorneys on this website who can assist you with an offer, including my firm. I would only mention that for some taxpayers, a payment plan is actually a better alternative. Ask the attorney you hire for an assessment of your personal financial position so they can help determine which option makes more sense.