IRS debt reduction. Has anyone had success using a lawyer for tax reduction?

Answer 1

I am an enrolled agent, licensed by the US Treasury Department and specialize in taxpayers who have large unpaid tax bills and prepare these for clients. You do not have to have a representatative but the process can be pretty intimidating if you haven't had any experience. That decision is up to you. The advice to stay away from the "As seen on TV" folks is valid. I never hear good things about them and their fees are about triple mine. I had one person who owed $6,000 in back taxes tell me that three different ones wanted $3,900 in fees. That left me breathless.

Here is how the deal works: An Offer in Compromise is a settlement with IRS where you pay less than 100 cents for every dollar you owe and IRS forgives the rest. It will do this if it determines you are offering as much or more as it could collect from you through monthly payments or seizing your property.

The amount you have to pay is, to use the IRS jargon, is "an amount that represents the reasonable collection potential of the account." This is a lump sum equal to what you could get from the equity in all your assets if they were sold at a quick sale, generally 80% plus 48 times what you could pay monthly on an installment agreement.

For example, if you had a car worth $10,000 and owed $5,000 on it and nothing else and IRS said you could make payments to IRS of $100 per month you would have to offer 80% of $10,000 minus the $5,000 owed = $3,000 PLUS 48 times $100 = $4,800 for a total of $7,800 on whatever you actually owed. You could make up to 24 monthly payments but would have to increase the 48 monthly payments to 60 for a total offer amount of $9,000 at $375 per month. How someone who could only pay $100 per month could be expected to pay $375 is a mystery.

I got an offer for a client who owed a quarter million dollar liability accepted at 1 cent on the dollar. Many other clients have not qualified. The average nationwide for accepted offers is about 17 cents on the dollar. Your own affairs may be more complicated, and it probably are if you add a home and a 401(k) plan and a car that will be paid off in just a few years, you would have to go through these gyrations with every asset. Your case might also dictate an entirely different approach including getting the whole account put on ice for a few years or filing for bankruptcy.

Answer 2

Reduce Irs Debt

Answer 3

Call 1-800-829-1040, or any phone number you have on the letter IRS has sent you. IRS will not give you a reduction, but you can work out a payment plan to pay off your debt in 60 months, of course interest and penalties continue to accrue.
OIC is a long process, there is fee involved and while they take long to process your request the I/P are still accrueing.
SET UP an INSTALLMENT AGREEMENT, if you can pay provide IRS with a Form 433-f collection information statement, provide 3 months current pay stubs & bank statements, proof of any medical bills you are paying, unusually high bills, proof of paying automobiles, insurance, rent, or mortgage, when IRS input the information into there system it will give them a total you are able to pay per month.
good luck.

Answer 4

You should take a look at the options you can find at: IMMEDIATELOAN.NET-

RE IRS debt reduction. Has anyone had success using a lawyer for tax reduction?

#EANF#

Answer 5

Actually a CPA or EA in your local area is probably the best person to call. Do not call one of the firms that advertises on TV or Radio. They will gladly take your money and do nothing.

A lot depends on how much you owe. If you owe under $10,000, don't bother. The IRS usually doesn't accept offers for debts this "small". If you over $10,000 you may qualify for an offer in compromise based on your ability to pay. If your assets (including equity in your home) are more than what you owe, again don't bother. Offers in Compromise are for people who can not pay not people can pay but just want to pay less.
Offers in Compromise can take up to 2 years and, even when done right, the IRS says NO over 80% of the time.

You can read about them at IRS.gov. If you feel that you may qualify, contact a CPA or EA in your area and find one that has experience in this area.

Answer 6

You don't need a lawyer. Call the IRS yourself and ask them to lower your debt. Just be nice and polite.

Answer 7

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Answer 8

no

I did have better returns using local Mom and Pop accountants than using the Turbo Tax type platforms