I was working a case a while back for a company that owed payroll taxes.  I told the IRS Revenue Officer working the case that he should cut the owner some slack because he had always paid taxes on time in the past.

The Revenue Officer sarcastically replied something like, "on behalf of the United States of America, I would like to formally congratulate and thank your client for doing what he was legally obligated to do anyway.  Now, what about the most recent quarters of unpaid tax??..."  Translation, what have you done for me lately?  So, there you have it, nonetheless, a formal thank you from the IRS to taxpayers everywhere.  Don't get used to it.

This smart anecdote raises a valid point: does past compliance and payment matter at all in working out present tax solutions with the government? I guarantee that if my client had a past of racking up tax debt upon tax debt, year after year (a phenomenon called 'pyramiding'), it would have been a hot issue with the Service.  In fact, the Internal Revenue Manual is replete with rules and procedures to stop and punish the habitual tax pyramider.  So, the opposite must be true, and it is.  But, the government is not likely going to make this argument for you.

When you are going for an offer in compromise, penalty abatement or virtually any other collection alternative/settlement, you have got to remind them of your good record in the past.  Of course, this doesn't work if you don't have a good past with them!  If you really do, though, you have got to present this fact in your presentation.  Do it early and often in hammering this point home.

The IRS is prone to shrug off this argument and others like it, if you are not represented by a zealous advocate.  Call the Law Office of Travis Watkins at 405-607-1192 today.  We make these arguments to the IRS daily.  We want to help you put your best foot forward in this process.  Remember, the IRS is not going to do it for you!

Travis Watkins
Senior Tax Attorney
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