Here is my situation. I have a compliance case and a collections case. My compliance case is for not filing my
1040 for 2003, 2004, and 2005; and for not filing 941 returns for all four quarters of 2001 and the first three quarters of 2002. My collections case is for over $28,000.00 for years prior to 2001, plus taxes on my income for 2003-2005, and 941 taxes yet to be determined. I have filed some of the returns I need to file to get into compliance. I will file the rest in the next week or two. I have received a lump sum disability check from Social Security. It is around $20,000. Obviously, I want to keep as much of that money as I can. I have also been told that I can use it to pay legitimate debts. I am getting my credit reports so I will know how many debts I have outstanding. I am also receiving a monthly benefit check of $700- $800. (It keeps changing every month.) This is my current living situation: I am living with my brother and his wife, without paying rent. I pay for food and other expenses occasionally. I am very willing to execute a lease with them, and pay them rent. Would the IRS let me pay them back rent for the months before I got my lump sum, or before I got my first monthly check? As I understand it, I have two options: an installment plan and an Offer in Compromise. Of course I would prefer the Offer. What can I do to arrange my finances to increase my chances of being turned down for an installment plan, and of having an Offer accepted? Thank you in advance for any help you can give me with this.
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