Arizona Tax Lawyer Blog

Many reading this entry are likely wondering who "Koko Taylor" is. at least those who don't follow "Blues" singers.

To tell the truth, I didn't know either until I read this forbes article.

Apparently, Koko Taylor is a blues singer who has won at least one Grammy as well as 25 "Blues Music Awards."

In the 90s, she had some good years income wise, and just didn't withhold enough income tax resulting in a rather large tax debt.

She is now about 80 years old and you'll probably agree that, her name is cool.

The point of this entry though is not to acquaint you with Koko Taylor, Blues singers, or to help you find a name for your child or your dog.

It is for the purpose of pointing out a few things about the offer in compromise that can be gleaned from this article. Things that may be of interest to the average consumer or small business taxpayer with serious tax debt and a sleepless night or two.

First, Offers in Compromise are legal matters as are all tax issues. This means that they fall under the jurisdiction of the U.S. Tax Court. They must be signed under oath, and the signer is subject to perjury penalties.

Second, A "rejected" Offer in Compromise can be appealed to the U.S. Tax Court.

Third, the appeal is often made on the basis that the IRS "abused" it's discretion in determining to reject the offer in compromise.

Fourth, whether the IRS "abused" it's discretion or not is a factual matter. A successful appeal is therefore factually driven, and the process of preparing, filing, negotiating and then appealing the offer in compromise should be done very carefully as a result. Every communication, and every word in every communication may have significance in the end. It is wise to seek local legal counsel.

Fifth, Koko Taylor doesn't appear to have filed an offer in compromise based on a doubt as to her ability to pay the debt, she appears to have filed it under a much less common method, "effective tax administration". She probably had enough assets and income to pay the debt off, but she felt that it would be "unfair" for a number of reasons to make her do so. This was probably a more difficult case to make the "abuse" claim stick then a doubt as to the ability to pay may have been.

Sixth, Tax Court Judges don't care about your fame or lack thereof.

If you have serious income tax debt, and are potentially an offer in compromise candidate or have had one recently rejected, call me, Arizona Tax Attorney, Michael S. Anderson at 480 507 5985 to discuss the seriousness of doing it right the first time, or whether it may be worth it to appeal to the U.S. Tax Court.