FORMER IRS ATTORNEY WARNS OF THE DEATH
OF IRS “PENNIES ON THE DOLLAR” PROGRAM

Offer in Compromise Program Changes
- June 29, 2006

ELMHURST, Ill., June 29, 2006 -- Patrick T. Sheehan, former IRS attorney, warns of the imminent demise of the IRS’ Offer in Compromise program. The Offer in Compromise program, commonly known as settling for “pennies on the dollar”, will dramatically change on July 17, 2006, the effective date of recently enacted legislation passed by Congress and signed into law by President Bush on May 17, 2006. “I have long thought that the IRS has been trying to kill the Offer in Compromise program, and this new legislation proves me right,” said Sheehan.

If eligible, an Offer in Compromise allows a taxpayer to “cut a deal” with the IRS. Sheehan says that, “The recently enacted legislation will make it more difficult than ever to obtain an Offer in Compromise, if at all, after July 17, 2006.” Under the new legislation, a deposit equaling 20% of the amount offered must be paid with the filing of a cash Offer in Compromise. Monthly payments under a deferred Offer must be made while the Offer is pending. Sheehan believes that these recently enacted legislative changes are the death knell of the Offer in Compromise program. Sheehan notes that, “Most people in trouble with the IRS are already in severe financial difficulty. Requiring them to make a deposit of 20% of the amount offered, or to make payments while an Offer in Compromise is pending, will put an Offer in Compromise out of reach for all but the most destitute of taxpayers.”

Surprisingly, most personnel within the IRS are unaware of the new legislation. According to Sheehan, “The time to determine whether you are eligible to file an Offer in Compromise is now, but time is running out.” Sheehan recommends that any Offer in Compromise be filed not later than July 13, 2006, in order to be treated under the current Offer in Compromise program. The current program does not require a down payment or monthly payments while the Offer is pending. “I feel that the new legislation will make it virtually impossible to obtain an Offer in Compromise in the future,” Sheehan said.

Sheehan is the President and Senior Partner of Patrick T. Sheehan & Associates, Attorneys at Law, P.C., a law firm that practices only in the area of tax dispute resolution before the IRS.

Click here to contact Mr. Sheehan (or call 877-4-IRS-LAW) for more information.