If worries about your tax debt are keeping you up, you may have seen one of those ads on late-night TV promising tax assistance that will have you paying only “pennies on the dollar” to the IRS. While there are reputable companies offering legitimate services to help you file a request to reduce your tax liability, the IRS warns of unscrupulous promoters who charge high fees while making false claims about reductions they can negotiate. How can you tell the difference?
The “Too Good To Be True” Red Flags
First, be cautious of any upfront promises to reduce your tax liability. The IRS procedure for requesting a reduction calls for submitting an Offer in Compromise (OIC), and the rate of OIC acceptance is well under 50%.
Another red flag is the promise of a dramatic reduction in your tax liability. The IRS carefully reviews your finances and ability to pay, and your situation would have to be genuinely catastrophic to warrant the reductions scammers claim they can achieve for you.
Promises of connections within the IRS to help with your request are bogus. The taxpayer submits the OIC, and there is no guarantee about which IRS agent will review it.
You should also beware of emails or texts promising tax debt relief that seem to be from a reputable firm you have hired in the past. Rather than click on any links, go directly to the firm’s website—the offer probably doesn’t exist there.
A Reputable Firm Can Advise You on the OIC Process
To qualify to submit an OIC, among other requirements, you must not be involved in any open bankruptcy proceedings, be up-to-date on filing your federal tax returns and any estimated tax payments, and if you are self-employed and have employees, you must have submitted all required federal tax deposits.
A reputable tax firm will advise you on qualification requirements for submitting an Offer in Compromise and how to most effectively complete one. If you do not qualify, they can help you determine the next best course of action. Contact the qualified tax professionals at Highland Tax Group for the expert assistance you need.