Offers in Compromise Can Be Lifesavers
The program that allows indebted taxpayers to enter a compromise offer to
the IRS can be a lifesaver. But there are a lot of scams out there. Even
the IRS warns against them.
By Stanley H. Block
Harold was a good, decent guy. At 45 years old, he stood six foot two with
a head of brown hair balding slightly in at the crown. His first daughter
had just gone to college at Princeton. He was proud.
But he was also nervous. Debts were piling up. The one that bothered him
most was the roughly $50,000 he owed to the IRS.
That’s when he saw the sign on the side of the road. “Eliminate Your IRS
Debt,” it read. The skeptic in Harold knew to be cautious of any business
advertising with a picket sign, but he called the number.
A disaster.
The company that was supposed to help him eliminate his IRS debt proved to
be inexperienced, incapable, and incompetent.
They put Harold in a world of hurt. And that’s when he came into my
office. He needed the damage mitigated and the problem solved.
Though I don’t hear stories like Harold’s often, they are out there.
Unrepeatable companies offer to help taxpayers eliminate their debt. You
have to be careful.
In fact, even the IRS warns about vetting the tax professionals you hire.
“We do warn taxpayers to watch out for unscrupulous promoters charging
excessive fees to taxpayers …” said IRS Commissioner Mark W. Everson in a
statement October 25. “Taxpayers should not be duped by high-priced
promises.”
Just as you look for the best mechanic or real estate agent, you should
also look for the most qualified tax professional. When it comes to
dealing with issues as important as taxes, you don’t want to deal with one
of the fly-by-night amateurs Harold encountered.
“You’ve got to help me,” Harold explained to me at our initial meeting.
“My kid’s in college. I’m taking care of my other debts. Now, I want to
take care of my IRS debt.”
And we did.
Fortunately, Harold qualified for an IRS program called an Offer in
Compromise. After years of having to chase down deadbeat taxpayers, the
federal government learned that the best approach can often be the most
flexible.
For those that qualify, a taxpayer can make a lower offer on his/her tax
debt that will often be accepted by revenue officers.
The reason is simple: The IRS wants to help you find a way to satisfy your
tax debt. An Offer in Compromise is one such way.
With the help of a qualified tax professional, you can sometimes reduce
your tax debt by pennies on the dollar. While that’s a best-case scenario,
an Offer in Compromise can be the best way to tackle your tax debt.
Just be sure to find a qualified tax professional. Ask Harold. He learned
the hard way.
Stanley H. Block is a Maryland State Tax
Attorney and a member of the American Society of IRS Problem Solvers. You
can contact him at 410-727-6006 to obtain a free subscription to his newsletter
titled The IRS Times & Inquirer.
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