Making an Offer of Compromise After Receiving a Lump Sum of Money

**buddyboy2007** · 09-07-2007, 12:19 PM

I owe a large amount for back federal taxes. I live in California. At the moment, I do not have the money to pay or even make an offer. I am about to receive a lump sum payment from my mother's pension as I am the beneficiary. Is there a way to protect that money from being levied by the government so that I can have an opportunity to make an offer to pay it or a portion of it? I don't want to deposit it into a bank account and find a great portion has been taken. Is it true that if I put an uninterested parties name on the account with mine, the money cannot be levied? I want to pay my debt, but if there is a way for me to pay a lessor amount, of course I would rather do that.

**irsfixer** · 09-07-2007, 01:55 PM

In an Offer in Compromise, the IRS will want what you have now - plus the amount you receive from the pension. The IRS will not know when you receive the money (unless they monitor this board. LOL). However, when you get into collection again, you will have to disclose it or commit perjury.

Putting the money in a joint account can prevent a successful levy only if the account requires two signatures to withdraw money. But it is still yours and subject to disclosure. Futhermore, I think by definition, the third party is NOT disinterested. If it can be shown you are structuring transactions to defeat or evade payment of taxes, you could lose the money and your freedom. And that goes for your little dog Toto too - ie the third party.

You need the help of a professional, as this is a mine field

**buddyboy2007** · 09-07-2007, 02:01 PM

Thanks for the quick response. What are the possibilities of being able to reduce the amount of taxes owed knowing that I will be or have received a large sum of money. Do you think they will be willing to take less since I legitimately did not have the funds to pay prior to my mother's death?

**irsfixer** · 09-07-2007, 02:23 PM

The problem is this, an Offer in Compromise can take as much as a year from start to finish. The average is 6 to 10 months but many go longer. If you receive the money in the meantime, it needs to be disclosed.

Even if the money is more than a year away - you will be asked if you are the beneficiary of any trust, etc.

A public forum is not the best place to deal with this issue. The more detail you provide here, the bigger hole you could be digging. No one is going to provide advice on here as to how you can hide assets.

**Bubba Jimmy** · 10-14-2007, 05:43 PM

I would only add a word of caution. There are many firms who will tell you "we settle with the IRS for pennies on the dollar". They are companies that will file the OIC for you. They will require a retainer up front, typically at least $1000. They will gurarantee nothing, and they will pursue the case even if there is no likelihood of success. For example, if you have substantial income and the IRS knows they will eventually collect their money then they will never accept the OIC but some of these firms will never tell you that.

I've personally never know of an OIC being resolved in less than 16 months. They take a long time, they cost quite a bit, and they are often not worth what you pay to pursuie them.

**irsfixer** · 10-14-2007, 08:51 PM

I have never had an Offer go much over a year. I filed one recently that was assigned and worked within 45 days of being received by the IRS. That was freaky fast.

**Chippewa** · 11-22-2007, 07:23 PM

In addition to what has been said above. You will be, or have been, asked to disclose all of your assets. You sign the IRS forms under penalties of perjury. Lying to a federal agent relative to a material matter is also a felony, ask Martha about that one. Hiding assets from the government to prevent it from collecting its money is also a crime. When two or more poeple conspire to commit a crime, that too is a crime.
Lastly, if you were to put the funds in the name of "a disinterested third party" the government can "follow the money" and collect it using the "transferee liability" statute. Depending on the type of pension you will be receiving as an heir it may be taxable to you in the year received. See an attorney or another tax professional before you do something foolish.