As discussed in our last blog, 4 Steps For Filing Back Taxes, http://kasperekaccountants.com/4-steps-for-filing-back-taxes ,businesses and individuals alike find themselves in trouble with IRS and need help (referred to as “Tax Resolution”). Unfortunately there is all kinds of misleading claims floating around from late night TV ads, various websites, ‘white papers’ or other published articles. One cannot undo the harm caused by these claims. The record is set straight here about solving back tax problems.
“An Offer in Compromise will solve all my back tax problems.”
Do not be fooled! 80% of all Offer in Compromises are rejected. Unscrupulous firms do not disclose this information to the taxpayer. In general, if there are enough assets and income available, the taxpayer will not qualify for an Offer In Compromise.
“IRS will accept ‘Ten Cents On The Dollar’ or ‘No Money Down’ or ‘Small Monthly Payments’.”
IRS has probably accepted these proposals from very desolate people. Realistically, this type of settlement is a pipe dream fostered by scammers. If anything, a low offer sends a signal to IRS you are not being a serious negotiator!
“IRS will waive all Penalties and Interest.”
Once IRS has assessed penalties and interest, it is not easy to get them waived. The IRS procedures are very strict. Rip-off artists will make lavish guarantees about getting them waived. Legitimate tax professionals will never make such promises. In fact, it is an ethic violation of practice before the IRS to make such a promise!
Now that the Misleading Claims have been exposed, what are the realistic options for solving back tax problems?
Offer In Compromise is a legitimate tool. Despite the damaged reputation of this program caused by all the hype from bad sources, it is not scam! IRS may accept an offer if exceptional and extreme circumstances exist. IRS has a Pre-Qualifier calculator on its website as a first step to help determine if an Offer In Compromise is a viable option.
IRS may accept a Reasonable Offer. The IRS really will negotiate but the key word is ‘reasonable’. IRS has a Fresh Start Program that has helped thousands of struggling taxpayers, especially if the balance due is less than $50,000.
There is a procedure to waive penalties and interest. Penalties and interest may be waived (technically referred to as “Abatement”) for ‘reasonable cause’ after demonstrating ‘ordinary care and prudence’. There are forms to file and letters to submit. One wrong word or statement and the request will be denied. However, penalties and interest can, and are, waived every day by experienced tax professionals.
A firm with your best interests in mind will inform you upfront if you have a chance at success or not with exploring these realistic options for solving back tax problems.
Do not forget about the Missouri Tax Amnesty program! This is a one-time opportunity to settle with the state of Missouri for back taxes and waive all penalties and interest. The deadline is soon–November 30, 2015.
Kasperek & Co. Accountants has had the satisfaction of solving back tax problems for people for almost 30 years.