Taxes are a headache enough already, but unfortunately, some people may not have the funds or ability to pay off their taxes to the IRS.
Tax relief companies offer their services to help those who owe overwhelming taxes; however, these companies are offering services that really anyone can do themselves. Even worse, the more unscrupulous companies will offer services that have no guarantees and then run off with the money you may have paid them. Some tax relief companies utilize legitimate IRS hardship programs, but the problem is that not everyone is eligible to receive these benefits despite what the tax relief company may say. Some companies may even be outright scams and will not settle the tax debts or may not send out the necessary paperwork, leaving their customers a thousand dollars poorer while still having to pay the dreaded taxman.
Luckily, any services these tax relief companies may offer are things you can easily do yourself. Consider several different options that the IRS offers to citizens who owe taxes or debt to the government:
- Installment Agreement: This is the most common way people can help pay off their tax debts to the IRS. This agreement allows a citizen to pay off their debt through a series of monthly payments instead of all at once. According to the Fresh Start program provided by the IRS, people who owe taxes under $50,000 may qualify for a repayment plan that may last up to several years. If you feel that you qualify for this, you can apply at the IRS online portal. An installment plan is great for people who want to avoid the IRS taking action against them such as a Federal Tax Lien or an IRS levy.
- Offer in Compromise (OIC): This allows people who have suffered detrimental events in their lives to pay their tax debts for less than they owe. However, it is much harder to qualify for this program. For more information on OIC, check out the IRS website and use their tool to see if you qualify.
- Penalty and Interest Abatement: These programs happen in very limited circumstances. Penalty abatement is where the IRS forgives any tax penalties if the citizen has suffered any special hardships. An interest abatement may eliminate any interest penalties that you may owe for taxes. Remember that these abatements do not happen very often and are only offered to people who fall between a narrow set of circumstances.
These types of programs are available to all taxpayers without the help of third-party companies. In fact, only certain third parties are legally allowed to represent you to the IRS: federally-authorized enrolled tax agents, certified public accountants, and attorneys. If you feel you need a third party to represent you, try to work with one of these qualified professionals. Meet them face-to-face and avoid any tax relief company that works only online or over the phone. You can find reliable third parties to represent you at the Taxpayer Advocate Service, which works inside the IRS.
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Originally posted 2022-10-07 08:12:00.