With all the so called "we can reduce your IRS debt for pennys on the dollar" companies, obviously to good to be true. How does someone work with the IRS to resolve their debt without getting shafted or taken for a ride? Or worse, losing property or wage garnishment.
2007-04-30 06:46:18 · 8 answers · asked by GL G 2 in Business & Finance ➔ Taxes ➔ United States
Set up a payment plan, get married, have a few kids, and next year when tax time rolls around all that you get back in taxes will pay your previous years debt!
lol just kidding
I'm not sure there is a best way, they always seem to suck you dry with interest and penalties.
2007-04-30 06:55:26 · answer #1 · answered by Heather 3 · 0⤊ 3⤋
The "we can reduce your IRS debt for pennies on the dollar" companies are pushing an "offer in compromise". This is an actual option in some cases. It is not in most. In either case, these companies are not a good option. You can request an Installment payment plan. I included links to an IRS FAQ about Installment plans and an IRS page titled "Is an Offer in Compromise Right For You?".
2007-04-30 12:12:40 · answer #2 · answered by STEVEN F 7 · 0⤊ 0⤋
Work out a payment plan and stick to it. That's about it for most taxpayers.
Keep in mind that the ads from those firms that claim to be able to settle debts are very misleading. For one thing, there are 100 pennies in a dollar and if they resolve your case for 99 cents on the dollar, they've delivered on their promise. With their fees, the total debt you owe would probably increase, not decrease.
It is possible to successfully pursue an Offer in Compromise but the rules are very strict and you must lay out the most intimate details of your finances to IRS scrutiny to have any chance of approval. You either must substantiate doubt as to your liability in the first place or essentially be unable to ever pay the debt or establish that the circumstances that lead to the debt are so unusual that the only equitable resolution is for the IRS to accept less than the amount outstanding.
2007-04-30 09:45:28 · answer #3 · answered by Bostonian In MO 7 · 3⤊ 1⤋
If you owe over $10,000 you can try an "Offer in Compromise". Go to IRS.gov and do a search. It is a rather cumbersome process. If you need help, contact a CPA or EA in your local area that has experience with these offers. The number you offer is based on a formula that is a combination of your assets and your future earning power.
A couple of things to keep in mind: The IRS has up to two years to decide on whether to accept the offer or not and they so "No" over 85% of the time.
These "pennies on the dollar" places will charge you a huge upfront fee for something that you may be able to do yourself.
2007-04-30 07:10:43 · answer #4 · answered by Wayne Z 7 · 4⤊ 0⤋
Offer in compromise or a installment agreement
There is a application fee of 150 for Offer in Compromise, and it most likely won't be approved unless you're in a situation where you are basically super broke with nothing. Pennies on the dollar companies are just crap
2007-04-30 08:19:49 · answer #5 · answered by mphsgurl79 3 · 0⤊ 1⤋
Just call them and tell them that you don't make that much money and you would like to make payment plans with them to resolve the debt, they will work with you.
2007-04-30 06:54:37 · answer #6 · answered by Anonymous · 0⤊ 0⤋
If you have a bad problem with the IRS, I suggest you hire a attorney that specializes in that field the lawyer will negotiate a settlement that is tailored to your best interest.
2007-04-30 06:55:46 · answer #7 · answered by Anonymous · 0⤊ 1⤋
You can work out a payment plan w/ the IRS.
2007-04-30 06:53:58 · answer #8 · answered by Jaden 2 · 0⤊ 1⤋