If you owe the Internal Revenue Service (IRS) taxes, you may be worried. You know the IRS will want the taxes paid and there may be interest and additional financial penalties to pay. If you are struggling to figure out how to pay the tax, the prospect of the additional costs and potentially greater penalties, you may feel overwhelmed and trapped. You fear contacting the IRS, but you do not know how to extricate yourself from this predicament.
You may even see some of the "tax relief" advertisements on television. They promise great things. You may be desperate enough that what they offer seems viable. We suggest you think again. While tax controversies with the IRS can lead to tax liens, audits, asset seizures and criminal prosecutions, there are many ways to avoid these outcomes.
The IRS offers many avenues for help, including toll-free phone numbers and a vast array of information on their website. You may find the amount of information overwhelming and confusing. If you know the complexity of your tax issue is such that you want personalized advice, and you do not want inadvertently to hurt your case by giving the IRS too much information, you may want to discuss your matter with a tax attorney.
With the IRS, in spite of the advertising claims, there are few ways to settle your tax debts for "pennies on the dollar." The Offer in Compromise program may provide a viable solution. The OIC program allows you to pay less than the full amount of taxes that you owe, but you must qualify and provide evidence of your financial hardship before the IRS will accept such an agreement.
The IRS site has a much of information on these matters, and the more you understand, the better you can evaluate professional help and the more likely you are to obtain the best solution to your tax controversy.
Source: Post-gazette.com, "The Color of Money: Some options for paying the IRS," Michelle Singletary, The Washington Post, April 11, 2014