Offer in Compromise
Shirley always loved gardening, so when she decided to take the plunge and open her own flower shop, she was excited to be doing something she loved while being her own boss.
It was a simple operation. She rented a small storefront and ran the shop herself. Things went well at first, but with the dawn of internet flower shops, she noticed business declining. When business was good, she always had the money to set aside for the taxes she knew she would owe at the end of the year. In order to keep the shop running, Shirley was no longer able to set money aside for taxes.
When tax time came, she filed her tax return, but unlike in previous years, she couldn’t send the money to pay the taxes along with it. She told herself that since wedding season was coming, she’d be able to make plenty of money to pay the taxes in a few months. A few months passed and wedding season wasn’t as lucrative as it had been in past years. Shirley wasn’t able to come up with the money to pay the taxes, so it got put on the back burner.
When it came time to file her tax return next year, Shirley was so afraid of what the IRS would do to her since she hadn’t paid last year’s taxes yet that she decided not to file her return. Soon, Shirley decided that the flower shop just wasn’t going to be profitable, so she decided to close her doors and go back to her old office job.
Just as she was getting used to having a 9-5 job again, she received a troubling letter from the IRS saying that she owed approximately $40,000 in taxes for the last two years that she operated her business. She had no clue how she was supposed to come up with $40,000. Her modest salary of $30,000 a year was just enough to pay her bills and have a little bit left over each month.
Weighing the Options
Shirley decided that she didn’t want the flower shop haunting her and called Steidl and Steinberg Tax Services to see what her options were. The attorney at Steidl and Steinberg Tax Services told her that she was a good candidate for an offer-in-compromise. She would have to provide financial information to show that, while she could repay some of the tax debt, she could not repay it all.
About two months after she provided the financial information to the attorney, she received a call saying that her offer-in-compromise was approved. Not only would the IRS stop tacking on interest and penalties, but she would only be repaying about $15,000 of the $40,000 she owed at a reasonable monthly payment. Shirley was glad to learn that she would be able to take care of her tax debt and resolved to keep gardening as just a hobby.
Could this be you? If this situation sounds familiar, consider contacting Steidl & Steinberg to learn more about our Tax Services.