Tax relief companies claim they can reduce or even eliminate your tax debts and stop collection of back taxes by applying for legitimate IRS hardship programs. The truth is that most taxpayers don’t qualify for such programs. The tax relief companies don’t usually settle the tax debt and in many cases, don’t even send the necessary paperwork to the IRS.
If you owe back taxes and don’t know how you’re going to pay the debt, don’t panic. Instead, consider your options. If you are having trouble paying bills, it’s often better to try to work out a payment plan with the creditor yourself than to pay someone else to negotiate a plan for you. The same is true when you owe back taxes to the IRS or the State.
If you owe back taxes and you are having trouble meeting your tax obligation:
If you can’t pay your taxes or your payments are late, the IRS charges you penalties and interest. It also has tax relief programs to help people who owe back taxes:
According to the IRS, you can apply for an Installment Agreement, OIC, or penalty or interest abatement without the help of a third party. If you prefer third-party assistance in negotiating with the IRS, only certain tax professionals — Enrolled Agents (federally-authorized tax practitioners who can represent taxpayers before all administrative levels of the IRS), Certified Public Accountants (CPAs), and attorneys — have the authority to represent you. Their services should involve a face-to-face meeting where they explain your options and their fee structure.
The Taxpayer Advocate Service is an independent organization within the IRS that provides free help to people who are experiencing financial difficulties or who need help resolving a problem with the IRS. Call (877) 777-4778 or visit www.irs.gov/advocate.
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