Tax Debt Solutions Blog

Tax Relief: Hire A Tax Professional

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Tax Professionals

Many ads claim they can assist you to pay an IRS debt for less.  They profess knowledge to reduce your awful tax bill.  Many call this ‘pennies on the dollar’.

They may have helped a few taxpayers pay less, but it’s not easy.  It is probable that even more taxpayers cannot reduce tax bills even with their assistance.

Such companies hand in an OIC (Offer in Compromise) for the client.  In certain situations it’s an alternative where the IRS accedes to an amount lower than the taxpayer’s complete bill.  The IRS only does this when it’s more gainful to obtain money fast instead of spending years and money getting the taxpayer to settle in full.

The ads promise it’s an easy route.  However, realistically they can’t decide on an amount and the IRS approves it.  You must complete an OIC (form 656-A).  In addition, you must attach a completed CI (Collect Information).  CI (form 433-A) gives your financial data.  The CI data must verify inability to make full payment and your proposal must be reasonable.  A $150 fee must go with form 656-A (OIC).  Only proof of little or no finances will allow a reduced fee.  An additional 20 percent is required if you make a complete OIC amount.  For an installment OIC arrangement a first payment is required.

So, the reality is the IRS doesn’t make it easy to reduce your tax bill.  ‘Offer in Compromise mills’ or ‘pennies on the dollar companies’ aren’t your best solution.  Tax experts and the IRS share this view.  You must pay such companies whether they fulfill their promise or not.  There is a belief the IRS is going to penalize such companies for misleading taxpayers.

A qualified tax professional has the expertise to follow IRS regulations and processes on your behalf.  He or she will give you an honest estimation of your tax situation.  This is preferable to wasting time and cash on a company that doesn’t fulfill its promise to reduce your tax bill.