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Owe Back Taxes To Uncle Sam? Consider This.

Owe Back Taxes To Uncle Sam? Consider This. - The Beacon

01-2012

By: Tom

Owe Back Taxes To Uncle Sam? Consider This.

Now that we’ve gotten through the holidays, many individuals and businesses are turning their attention to tax preparation. Unfortunately, some individuals and businesses owe money to Uncle Sam, and if the amount owed is an excessive amount, typically more than $15,000.00, then people start thinking about using a “tax negotiating” firm to assist in working out a settlement with the IRS.

The following advice comes to us from our friends from the BBB serving the Los Angeles, CA area.

Typically these companies advertise that they can settle tax related debts for less than the amount owed.
In some cases, the company will calculate what they believe will be the amount you save by utilizing their services. Generally the fee they charge will be based on the projected savings, while others charge a flat rate of several thousand dollars.
Our complaint experience on many of these firms indicates that they exaggerate their ability and expertise in effecting settlements and often promise much more than they can deliver. They generally attribute their inability to obtain settlements on the fact that the customer provided inaccurate or incomplete information. None of the firms guarantee that anyone will be able to obtain a settlement of their tax debt.
We urge caution. Many taxpayers have been left with the original tax debt, along with additional interest and penalties.
If you have tax debt with the IRS, we suggest you first seek the advice of an IRS enrolled agent, CPA, or a tax attorney. You may also consult with the IRS to determine if you would qualify to file for an offer in compromise, or some other type of payment arrangement. To learn about the IRS’s rules for an offer in compromise, visit www.irs.gov.

If you do plan on using the services of a tax negotiating service, first check the firm’s BBB’s business review by visiting www.bbb.org and don’t rely solely on a company’s testimonials. For more information you can trust, visit www.evansville.bbb.org.

Read more:

IRS Tax Tips: Keeping Records (Video)

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Tom

Tom is Vice President for the Tri-State Better Business Bureau. In addition to answering the needs of our accredited businesses, Tom can be seen on WEVV providing tips for businesses and consumers. He also works closely with other local media outlets to keep our community informed of marketplace issues affecting our area.