Fact or Fiction?
If you have tax problems it seems like wherever you look you will see ads from businesses offering to settle your taxes for “Pennies on the Dollar” for “As little as the change in your pocket”. If you have a tax lien filed against you, you will become flooded with letters and flyers and phone calls from businesses wanting to settle your tax liability for you. They will all offer to settle your tax liability through an OIC.
Is this true? Can taxes really be settled for much less than you owe?
Well the real answer is maybe. But only if you qualify. And qualifying is not easy. The IRS will not just hand out a settlement for a fraction of what you owe without you showing a severe hardship.
These unscrupulous so called “Tax Relief Organizations” will often make promises to you that they will do an Offer in Compromise and settle your tax liability. Then they will take thousands of dollars in fees from you. Then a year later will tell you that the IRS won’t accept your OIC, sorry, but you will have to pay the taxes.
In fact in many of these cases an Offer was not a reasonable alternative. Offers in Compromise are not easy to obtain from the Internal Revenue Service. They do not accept them unless there are serious doubts as to whether they will be able to collect the taxes.
What can a consumer do to protect themselves from these scam organizations that simply want to take big fees and not deliver:
First, before you give anyone a penny, check them out online. Do a Google search for Complaints against “ABC Tax Relief” or whatever their name is. Look at them to see whether they have complaints against them. Look at what their clients say about them.
Second, contact the Better Business Bureau and see whether they are listed with them and if so, how many complaints they have against them.
In my opinion, it is very difficult to tell a taxpayer whether they will qualify for an Offer in Compromise without having significant information about them. To determine whether an OIC will be accepted, we need to have comprehensive information about both a person’s assets and about their earnings. We also need to have information about how much their living expenses are. Only then are we able to recommend and Offer in Compromise as a viable option.
For more information about Offers in Compromise and what it takes to qualify for one, please visit our website: www.martellelaw.org/offer-in-compromise
Let the Buyer Beware.