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Sep 30 2017

What is the average IRS settlement? Tax Debt Advisors Inc #irs #settlement #offer


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IRS Help Blog

What is the average IRS settlement?

There are several different ways to settle with the IRS? I am always uncomfortable quoting or giving averages when it comes to settling up with the IRS. Here is why. If you are talking about a settlement with an Offer in Compromise, over 98% of the clients who come in don’t qualify for this type of a settlement for various reasons. So what good is an average when you are only talking about 2%. We have had some offers for as low as ½ cent on the dollar up to 88 cents on the dollar. If those were the only two offers, saying the average is 44 cents on the dollar is a ridiculous statement. For one it would be 8,800% too high and the other 50% too low. I suppose an average of 15% might be reasonable on all of the Offer in Compromises we have had accepted for clients.

If a client discharges their taxes under the Chapter 7 rules of bankruptcy then the settlement is zero. It is always zero. How do you give an average here other than to say our average settlement is zero if you choose to settle your IRS debt using a Chapter 7 bankruptcy? There is no average, it is always the same.

The best thing to do is to come in and find out what your settlement would be rather than rely on an average which will more than likely be much different than what you will ultimately receive. Once I know how much you owe the IRS, how long you have owed the IRS, and have some financial information, I can tell you what you can expect under all the options that are available to settle with the IRS. And that information will be much more valuable to you than an average from previous clients whose financial ability to pay on the amount owed that never matches your particular situation.

I like to tell clients that if you were a manager of a baseball team and you had two choices—send up a batter with a one in three chance of getting a hit or one you knew would get a hit, which would you choose? Obvious, you would go with the one you knew was going to get a hit. That is what you can expect from me. I will tell you what settlement you will get from the IRS, once I know the facts. Don’t ever take a chance on relying on averages when you can know the answer with just a little more time and effort. Practitioners who quote averages will always use that inappropriately to get you to use them and then when it doesn’t happen, will always use it to say, “Well, I was only giving you an average, your settlement is much higher now that I know the facts.” The best advice is to know the facts not the averages.

Scott Allen E. A.

Tax Debt Advisors, Inc

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