Perspective: Can’t pay IRS the taxes you owe? This is the one thing you shouldn’t do.
By Michelle Singletary Michelle Singletary Personal finance columnist Email Bio Follow Columnist March 21 One of the most frequently asked questions I get during tax season is this: Are the commercials I hear about helping me settle my tax debt for real?
I generally advise people to stay away from companies offering tax debt settlement. Save yourself some money and heartache. If it’s a scam, you’ll be out thousands of dollars — money you could have used to pay your tax debt. Even if the company actually helps you settle your debt, it seldom provides services you couldn’t have gotten on your own with a call to the IRS or a visit to irs.gov.— You are asked to send your tax documents such as your W-2 form, 1099s, etc.
But the fact is, company employees simply have you apply for what’s called an “Offer in Compromise” or OIC. This is a legitimate program offered by the IRS that is intended to help people who are so financially strapped that it’s unlikely the agency could collect all that the government is owed. But what the company may not reveal is that the bar to get an OIC is incredibly high.
Although Deutch denied any wrongdoing, she closed her law practice and voluntarily turned in her law license to the California State Bar. In 2015, the Sacramento Superior Court entered a civil judgment against Deutch, ordering her to pay $50,000 in civil penalties and $2.45 million in restitution to victimsHere’s free assistance you can get at irs.gov if you have a tax debt you can’t pay by April 15.
— You can apply for an OIC yourself. Read this on irs.gov: Offer in Compromise — Frequently Asked Questions
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