I have seen on TV thoses comercials about setteling you IRS debts for pennies on the dollar. has anyone got any advice about doing something like this? My friend just got letter he ows like $10,000 in back taxes.
not a good idea. from what i have read it is kind of a scam...kinda like credit repair organizations. why pay someone else to do what you can do yourself? they advertise pennies on the dollar but i think it really ends up being 99% plus their fee - or basically the full amount. the irs has a hardship program where under certain circumstances they will allow you to settle. otherwise, your out of luck. dont mess with the irs - they can take everything you own and then some! they do make payment arrangements.
The settlement program is called an "Offer in Comprise" where you have to request from the IRS the booklet of forms to fill out & submit with it proof from the last 3mths of (pertinent) expenses. It works. You can fill it out yourself. It'll ask you about your assets & income. They will use that info to see if it is plausible to collect payments from you over a period of time to get a larger amount of the outstanding balance or if you are enduring a period of "hardship" (long term) then they are likely to accept your settlement offer. The form above will accomodate either situation.
As in all industries there are scam artists and there are honest, competent practitioners. I am an Enrolled Agent and I specialize in OIC's. It is not something I suggest a lay person do for the following reasons: 1. The IRS criteria are demanding and rigid. They give absolutely no slack. While the vast majority of OIC applications are submitted by the taxpayers themselves, COIC (the office that processes OIC;'s) accepts only 6% of the Offers submitted - usually because it was prepared improperly. 2. With the OIC you have to submit a detailed financial statement listing all your income sources and assets. While Taxpayer Bill of Rights 3 prohibits the IRS from levying against you while an Offer is pending and for 30 days afterward to allow you time to appeal, remember - 94% of Offers are rejected - and the taxpayers just gave IRS Collection Division (COIC is a part of Collections) a full listing of everything the IRS can levy against. 3. COIC staff (both Brookhaven and Memphis) tend to write their own rules as they go along - usually against the taxpayers' interests. I had a case last month where the IRS tried to have the taxpayer pay 185 months of Disposable Income as the Offer amount. The Offer Amount cannot exceed the Disposable Income times the number of months left in the Statute of Limitations for Collections, which is 120 months. Therefore, the multiplier cannot exceed 120, and seldom should exceed 110 since it is rare that a taxpayer would propose an OIC less than 10 months after Assessment. The point here is you also have to be very familiar with the Internal Revenue Manual.
as far as his assests are he has an old pick up truck, and the colthes on his back thats about it. i told him to do something about it bec it wont just go away. even if just sending them $50.00 a month is better than doing nothing.
Re: Re: IRS question Actually, doing nothing is probably better. If you send the IRS money you hewlp keep yourself on their radar screen. If he can drop off their radar screen, the Statute of Limitations keeps ticking.
Re: Re: IRS question Someone who is licensed by the IRS to represent taxpayers before the IRS on the same basis as a CPA or an attorney.
