There are advertisements splashed all over the Television and the internet claiming to be able to settle taxes for pennies on the dollar. If you get a tax lien issued against you, you will get letters from outfits all over the country offering to settle your taxes for a small fraction of what you owe. Are these claims true? Can these organizations actually settle my taxes for a very small percentage of what I owe?
LET THE BUYER BEWARE!
The only way to settle tax liability for a fraction of what is owed, with certain exceptions, is through an Offer in Compromise. And no one can tell you whether you qualify for an OIC without obtaining detailed information from you.
Before you agree to have anyone represent you, you should do some research to determine whether they are for real, whether they have complaints against them and whether they have an A+ rating with the Better Business Bureau. A simple Google search for: “complaints against ABC Tax Resolution” (substitute the name of anyone you are considering hiring) and a Better Business Bureau search will quickly show you whether a firm is reputable or not.
For more information and links to the complaints against some of the more aggressive marketing firms that make promises that they often can’t keep, visit: http://www.martellelaw.org/offer-in-compromise
The short answer is that the IRS wants two things to settle an Offer. First, they want an amount equal to the value of your assets, after deducting liens against them. Second, they want as much as they believe they could get from your earnings for the next 4-5 years, after deducting what they consider normal living expenses. Without seeing a detailed statement of your particular budget, there is no way anyone can tell you whether you qualify for an Offer in Compromise. Beware.
At our website, we have much detailed information about resolving tax problems. Please feel free to visit our site located at: www.martellelaw.com