Has anyone used one of these Tax Savers Attorneys if you owe more than $10k in back taxes?
Saturday, February 16th, 2008 at
8:46 am
indo19999 asked:
I am curious if I should work directly with the IRS or if I should use these attorneys. get prescription drugs without prescription Will they lower what I owe? Will they add value or am I better off just handling it myself directly with the IRS?
I am curious if I should work directly with the IRS or if I should use these attorneys. get prescription drugs without prescription Will they lower what I owe? Will they add value or am I better off just handling it myself directly with the IRS?
The ones that advertise heavily tend to be huge ripoffs. They are famous for charging a lot, promising a lot but doing next to nothing.
The IRS has a process called an Offer In Compromise (OIC) for people who can not pay their tax debt. It is for people that can not pay. It is not for people who just want to see if the IRS will accept a lesser amount. If you could sell everything that you own and pay the debt, chances are, the IRS will decline the offer.
Go to IRS.gov and do a search. The form for the OIC is 44 pages long so it is a complex process. If you think that you may qualify, contact a CPA or EA in your local area. It will still cost quite bit but CPAs and EAs tend charge less than half of what the firms on TV charge.
I handle these kinds of cases professionally. Here is how the procedure works:
The As seen on TV resolution firms are pushing Offers in Compromise. This 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 matches the most IRS could squeeze out of you (experesed in legal gibberish) 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 a simple 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 lump sum payment of $7,800 on whatever you actually owed.
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 and others can come up with what it would take if they did qualify. Another resolution may work better for you.
If you want to hire a professional representative–enrolled agent, CPA or attorney–stay away from the ones that advertise on cable TV. I charge about a third of what they charge for the same service but for that price, you won’t see me advertising on TV. I can’t speak for other tax practitioners.
There was an article in Money magazine a couple of months ago on this very question. If you notice, there is no promise of any reduction in payment to you. You will get all kinds of promises, you pay thousands up front with the promise of paying cents on the dollar. They have your money, you have a hope and a promise. Try the IRS yourself, you have nothing to lose. If you are in real trouble, then inquire, but get promises, and references.
Use Enrolled Agents if you want professional help on dealing with IRS. CPAs and Tax lawyers tend to charge more while EAs charge less and get the job done as well. And EAs are certified by IRS so they also get more respect from the people working at IRS.
You are better off working directly with the IRS. I have to admit that I’m somewhat biased as a former collection representative for the IRS, but you’d be surprised at how many of these outfits do absolutely nothing at all for their clients–except take their money.