The Situation
Marco, a former restaurant owner, owed $91,500 in federal taxes, penalties, and interest. After the closure of a neighborhood restaurant after several unprofitable years, the balance had become difficult to manage. The case called for an analysis of whether the taxpayer could reasonably satisfy the debt from available assets and future income.
The Resolution Strategy
The team gathered business closure records, asset valuations, and current employment income, reconciled required returns, and prepared a financial analysis of reasonable collection potential. Rather than promising a percentage reduction, the team tested whether an Offer in Compromise based on doubt as to collectibility could be supported by income, expenses, and equity. The offer was evaluated against remaining business assets.
The Outcome
The IRS accepted a $14,300 compromise after completing its review. That resolves the $91,500 covered liability once the taxpayer meets the offer's payment and ongoing compliance terms. The reduction is $77,200, or 84.4%.
Names have been changed and photos are representative stock images used to protect client privacy. This case describes an individual situation. Eligibility and outcomes depend on each taxpayer's circumstances, are not typical or guaranteed, and past results do not predict future outcomes.
