You know, like the ones you see on TV, claiming they had a huge tax debt with the IRS and the company settled it for much less? How does that work?
They tend to be pretty big ripoffs.
Do a search on RipoffReport.com and you will see multiple postings on all of them.
They over promise, over charge, and the under deliver. Their fees are in the thousands of dollars and they are no better at getting a settlement offer with the IRS accepted than anyone else.
on Sep 16th, 2009 at 11:58 am
They’re mostly worthless. See http://www.irs.gov
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on Sep 16th, 2009 at 12:31 pm
The snow you into thinking that they can wipe out the tax bill if you’ll pay them instead.
The OIC uses a "reasonable collection potential" to determine if your offer is accepted. That’s basically asking you to come up with an amount equal to 80% of your assets if you sold them plus 4-5 years of payments of every dime over minimum expenses. If that lowers your tax bill you are truly broke.
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on Sep 16th, 2009 at 1:21 pm
They tend to be pretty big ripoffs.
Do a search on RipoffReport.com and you will see multiple postings on all of them.
They over promise, over charge, and the under deliver. Their fees are in the thousands of dollars and they are no better at getting a settlement offer with the IRS accepted than anyone else.
References :
on Sep 16th, 2009 at 1:58 pm
A certified Tax Attorney or Enrolled Agent can do the same thing without the fear of being ripped off. I mean, they may be expensive - I don’t know how much each one charges, but that have to answer to higher authorities to continue to work and they must take continuing education classes.
Or you can do it yourself. I understand if you are not comfortable negotiating with the IRS because it can feel intimidating, depending on your level of confidence in your ability to research, negotiate and keep good financial records.
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http://www.LoanWorkout911.org has a directory of tax attorneys
on Sep 16th, 2009 at 2:15 pm
The ones you see on TV are pretty bad, will take your money but probably not do a lot for you. If you think you might qualify for an offer in compromise, see a local Enrolled Agent.
Note: most OIC submissions are NOT accepted, and the ones that are cut it down to the "pennies on the dollar" only in very rare circumstances. Most likely you are going to have to just pay what you owe.
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on Sep 16th, 2009 at 2:53 pm
You apparently are asking about the IRS Offer in Compromise procedure. 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 an amount that represents what IRS could extract from in a reasonable amount of time. 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, that’s $8,000 minus the $5,000 owed = $3,000 PLUS 48 times $100 = $4,800 for a total of $7,800 on whatever you actually owed.
I am an enrolled agent, licensed by the US Treasury Department who specializes in taxpayers who have large unpaid tax bills and prepare these for clients. You do not have to have a representative but the process can be pretty intimidating if you haven’t had any experience. That decision is up to you.
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 are probably more complicated than my simple example. 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.
If you want to hire a professional representative–enrolled agent, CPA or attorney–stay away from the ones that advertise on cable TV. Their fees are about triple what I would charge my clients and many of them are on the Better Business Bureau bad guys lists. If you want additional information outside this forum, you can email me through my profile.
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