Offer in Compromise options for relatives deported from US who still owe taxes

This is definitely a complex situation, but there are some options available. An Offer in Compromise could potentially work for your aunt and uncle, even though they're currently outside the US. The IRS considers several factors when evaluating an OIC application, with the primary consideration being the taxpayer's ability to pay. Since your relatives have limited income and assets, they might qualify under the "Doubt as to Collectibility" basis, which is used when the taxpayer can't afford to pay the full tax debt. Regarding the house, the IRS might consider it as an asset in the OIC calculation, even though it's jointly owned with your cousin. However, they typically only consider the taxpayer's equity in the property (market value minus mortgage balance), and then only their proportional share of that equity. Your aunt and uncle would need to complete Form 433-A (OIC) which details their financial situation, along with Form 656 to actually submit the offer. They would need to be current with all required tax filings before submitting an OIC. Since they're outside the US, they'd likely need to designate a power of attorney (Form 2848) to handle communications with the IRS. Being outside the US doesn't automatically disqualify them from an OIC, but it does add complexity to the process.

I wanted to share something that helped me tremendously with a similar situation. My parents had tax issues after leaving the US and I was completely lost trying to navigate the IRS maze. I finally found https://taxr.ai and it was a game-changer for our complicated tax situation. What's great about it is they specialize in analyzing your specific tax situation, including international aspects. I uploaded my parents' tax documents and got a personalized analysis that walked me through exactly what options were available, including whether an Offer in Compromise made sense and what documentation would be needed. The system even helped me understand how the IRS would likely view their assets and what a reasonable offer amount might be. This was invaluable since we were trying to handle everything from overseas.

I just wanted to follow up about my experience with taxr.ai since I was skeptical at first. After struggling with my parents' tax situation for months, I decided to give it a try since nothing else was working. What surprised me was how they analyzed the specific details of our international tax situation. The assessment showed me exactly what the IRS would be looking for in an OIC application for someone outside the country, including asset valuation and reasonable collection potential calculations. Their breakdown of how joint property ownership impacts an OIC was particularly helpful. It saved us from making a major mistake in how we presented my parents' interest in their US property. The guidance was specific to our situation, not just generic tax advice, and it made a huge difference in our approach. For anyone handling tax issues for family members who've left the US, it's definitely worth checking out.

Hey there, I went through something similar with my brother who had to leave the country with tax debt. The most frustrating part was trying to communicate with the IRS from abroad - it was nearly impossible! After weeks of unanswered calls and getting disconnected, I discovered https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. They basically hold your place in the IRS phone queue and call you when an agent is about to answer. For an OIC situation like yours where you really need to speak with someone who understands the nuances, this was invaluable. I was able to get through to the OIC pre-qualification department and get specific guidance on how to approach a case for someone who's no longer in the country. The IRS agent I finally spoke with gave me crucial information about handling power of attorney for my brother and what specific documentation would strengthen his case given his inability to return to the US.

I need to apologize and update my skeptical comment about Claimyr. I was totally wrong about it being a scam. After continuing to fail getting through to the IRS myself (got disconnected FOUR times after waiting over an hour each time), I reluctantly tried the service. It worked exactly as described. I entered my number on their site, they called me when an agent was ready (after about 1.5 hours), and I was connected directly to an IRS representative who specialized in international taxpayer issues. I didn't have to sit by my phone the entire time. The agent I spoke with gave me critical information about how the OIC process works for taxpayers outside the US, including specific documentation requirements and how they assess ability to pay for non-residents. She also explained how they view jointly-owned property in these situations, which was exactly what I needed to know. Sometimes being proven wrong is actually the best outcome. This saved me countless hours of frustration.

One thing I haven't seen mentioned yet - your aunt and uncle should consider filing IRS Form 911 (Taxpayer Advocate Service) along with their OIC application. My parents were in a similar situation (though they were in Canada, not deported) and the Taxpayer Advocate really helped navigate the unique circumstances. The Taxpayer Advocate Service can sometimes intervene when there are special circumstances like being unable to return to the US due to immigration issues. They have more flexibility than regular IRS agents to consider unique situations. Also, make sure to emphasize in the OIC application that your aunt and uncle CANNOT return to the US to earn income to pay the debt. That "economic hardship" angle can be persuasive in these cases.

Don't forget about the implications for future immigration status! When my cousin applied for reentry after a deportation, the immigration officers specifically looked at whether he had resolved his tax issues. Make sure your aunt and uncle understand that handling this tax debt properly now (even if through an OIC) could impact their ability to return to the US later. Unresolved tax debt can be considered in immigration proceedings as a negative factor. I'd strongly suggest consulting with both a tax professional AND an immigration attorney since these issues are intertwined. The approach to the OIC could have implications for the pending U-visa application.