Settle Your Tax Debt for Pennies on the Dollar!

The Federal Trade Commission (FTC) says "B.S. on that!" (in so many words).

Here is what the FTC is saying about Tax Relief Companies:

• Tax relief companies use the radio, television and the internet to advertise help for taxpayers in distress.
• If you pay them an upfront fee, which can be thousands of dollars, these companies claim they can reduce or even eliminate your tax debts and stop back-tax collection by applying for legitimate IRS hardship programs. 
• The truth is that most taxpayers don't qualify for the programs these fraudsters hawk, their companies don't settle the tax debt, and in many cases don't even send the necessary paperwork to the IRS requesting participation in the programs that were mentioned. 
• Adding insult to injury, some of these companies don't provide refunds, and leave people even further in debt.
• Some taxpayers who filed complaints with the Federal Trade Commission (FTC) reported that, after signing up with some of these companies and paying thousands of dollars in upfront fees, the companies took even more of their money by making unauthorized charges to their credit cards or withdrawals from their bank accounts.

This is not to say that relief from unpaid back taxes is impossible.
Believe it or not, The IRS has a forms for this.

The following information also comes from the FTC's website:

• If you owe back taxes, there are several IRS tax relief programs to help, including the agency’s Fresh Start initiative:
• An Installment Agreement is generally available to people who can't pay their tax debt in full at one time. The program allows people to make smaller monthly payments until the entire debt is satisfied.
• Under its Fresh Start initiative, the IRS raised the threshold for streamlined installment agreements from $25,000 to $50,000 in tax debt, and the maximum repayment term from five to six years. Taxpayers who owe less than $50,000 may apply online with the IRS and don’t have to complete an IRS Collection Information Statement (Form 433-A, 433-B or Form 433-F).
• An Offer in Compromise (OIC) lets taxpayers permanently settle their tax debt for less than the amount they owe. The OIC is an important tool to help people in limited circumstances; taxpayers are eligible only after other payment options have been exhausted.
• Under its Fresh Start initiative, the IRS expanded the OIC program to cover a larger group of struggling taxpayers. However, the IRS will not accept an offer if it believes the liability can be paid in full as a lump sum or through an installment agreement. The IRS offers guidance on choosing a tax professional for an OIC on its website.
• According to the IRS, you can apply for an Installment Agreement, OIC, or penalty or interest abatement without the help of a third party. If you prefer third-party assistance in negotiating with the IRS, only certain tax professionals — Enrolled Agents (federally-authorized tax practitioners who can represent taxpayers before all administrative levels of the IRS), Certified Public Accountants (CPAs), and attorneys — have the authority to represent you . Their services should involve a face to face meeting where they explain your options and their fee structure.

CPAs and attorneys are professionals licensed and regulated by the various states. There are stringent educational and testing requirements for obtaining licenses to practice law or accounting.  These professions are governed by enforceable ethical standards and licensees are required to have regular educational updates.

- Mark S Gleason CPA
  www.lakes-cpa.com