You may have stumbled across a number of TV commercials for tax debt settlement firms that promise to settle your taxes. To remedy an otherwise frightful ordeal, many agencies help slack taxpayers with their debts, including filing for IRS tax debt relief, such as an Installment agreement. Negotiating for IRS debt forgiveness is a lifesaver for many; however, reaching out to the right people is important to set realistic expectations and chart the best course of action. Continuing the discussion, this blog provides detailed answers to why checking the authenticity of tax debt settlement firms is so important and what you can expect.
What are Tax Settlement Firms?
Legal agencies in the US provide tax resolution services to help taxpayers minimize the amount of IRS tax debt they owe the IRS. Most such firms have a litany of tax experts, some ex-employees of the IRS who can bat on behalf of clients to resolve issues to do with unpaid taxes. Though most firms are legitimate, may advise genuine IRS tax relief programs, and may indeed have former IRS employees employed, some misrepresent their makeup and competencies to hoodwink unsuspecting taxpayers with such bold claims, as the ability to get all your tax debt written off in a jiffy. You must avoid falling prey to such tall claims and be in a position to identify fraudsters. Falling into the hands of fraudsters lands you in more trouble than when you started out.
What Do Counterfeit Tax Settlement Firms Do?
Most tax debt settlement firms promise to send one of their IRS experts to the IRS offices to mediate or persuade them to accept a relatively smaller amount as compared with what you owe the IRS. Some tax resolution services even convince taxpayers that their experts can pacify the IRS into accepting pennies for dollars, allowing the taxpayer to walk scot-free. In reality, such results are hardly achievable and if it sounds too good to be true, it probably is. Getting complete tax debt relief from the IRS is virtually impossible unless the taxpayer is either incapable of getting employment or has no assets that are valuable enough to cover the unpaid tax liabilities.
What Do Genuine Tax Settlement Firms Do?
Though the IRS requires every taxpayer to pay their taxes on time, many people are unable to abide by the directive. But not all is lost. Genuine tax settlement firms help taxpayers explore IRS debt relief options.
How an Installment Agreement Helps in Resolving Tax Debts
The IRS tax installment agreement, as the name suggests, is a payment plan under the IRS debt relief program, for taxpayers who are unable to pay off the entire debt in one go. The Law Offices of Nick Nemeth has a team of experienced IRS tax lawyers and professionals who can help you request an installment agreement with the tax agency through the following installment agreements:
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Guaranteed Installment Agreement
A taxpayer qualifies for this installment plan if they owe less than $10,000 in taxes to the IRS. In addition, they need to satisfy certain other conditions, such as they shouldn’t have any late filing, late payment, or installment agreement in the previous 5 years. The biggest advantage of going for a payment plan is that once the request is approved, the IRS will not file a federal tax lien against the taxpayer for any outstanding dues.
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Partial Payment Installment Agreement
A partial payment installment agreement (PPIA) entails making a partial payment of the taxes owed, based on what the taxpayer can actually afford. To qualify for this payment arrangement, the taxpayer must submit Form 433-F reporting their income and living expenses. If the IRS approves the request, the taxpayer will be required to undergo a financial review every 2 years. The reviews are done to evaluate whether their financial situation has changed, based on which the IRS decides the course of further action.
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Streamlined Installment Agreement
Taxpayers who owe $50,000 or less to the IRS as of 2017 are qualified to request this IRS tax installment agreement. They must, however, agree to pay off the balance in 72 months or less. Just like in the case of a guaranteed installment agreement, the IRS does not file a federal tax lien in streamlined installment agreements. In addition, taxpayers are not bound to submit Form 433-F.
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Non-Streamlined Installment Agreement
This installment agreement is meant for taxpayers who owe $50,000 or more. This payment plan is also suitable for taxpayers who don’t qualify for a guaranteed or streamlined installment plan, and who need a repayment term longer than five years. As part of this installment agreement, a taxpayer must file Form 433-F and propose an installment payment amount based on their income, expenses, and debts.
Offers in Compromise
A universally accepted and legally approved procedure known as “Offer-in-Compromise” to slash a significant amount of your tax debt. It is a special type of IRS tax debt relief program, wherein a taxpayer can get substantial relief from their tax debt, in exchange for a much lower value. Though the process is undoubtedly lucrative, the taxpayer is required to furnish comprehensive details about their current assets, liabilities, and even projected income. The number of Offer-in-Compromise approvals is fairly low, given the fact that taxpayers need to prove that the stated amount is incorrect, chances of making a full payment are very low, or paying the taxes can result in financial turmoil for them. In addition, getting approval on an Offer-in-Compromise is a time-intensive process that may take several months, which is why taxpayers shouldn’t let fraudulent tax settlement firms take them on a wild goose chase.
How To Tell A Genuine Tax Debt Settlement Firm From A Fake One?
Though there are no proven ways to spot a genuine tax settlement firm from a counterfeit one, you can always look for specific red flags. If a firm claims to have the ability to get your tax debt waived completely or significantly, overnight, chances are it’s a scam. Any representative of a tax debt settlement firm that makes such bold claims, without getting insights about your financial background, is more likely to be a scammer. Genuine and credible tax settlement firms first gather the necessary financial data before providing a realistic assessment of what they can and cannot do to help you secure IRS tax debt relief. Moreover, authentic tax settlement firms back up every claim they make and charge a fixed, reasonable fee for their services. Fake tax debt settlement firms, on the other hand, make unrealistic claims and have vague pricing structures. More often than not, they charge non-refundable upfront fees, and try to mint more money once the taxpayer is deeply involved in their ‘tax debt settlement process’.
Stay Alert!
Delinquent taxpayers often make every effort to get IRS debt relief, as the IRS has the legal right to seize assets and deploy extreme debt collection measures. Most taxpayers find the IRS to be the most intimidating among all creditors. Riding on this fear, many fraudulent firms defraud unsuspecting taxpayers looking to amicably resolve their outstanding tax debts with the IRS. It is therefore advisable to always stay alert when seeking professional help in settling your IRS tax debts. You need experienced and reputable tax attorneys to give you proven results. If you are facing tax debt issues in Fort Worth and wish to seek some reprieve, The Law Offices of Nick Nemeth is here to help. Our tax attorneys in Fort Worth can provide help for IRS tax problems of all kinds beyond tax debts. They can help you explore IRS debt relief programs and negotiate with the IRS to protect your interests and ensure tax compliance. To learn more about tax debt settlement pros and cons or to get a no-obligation free consultation, fill out our contact form, and we will get back to you right away. You can also call us at (817) 623-5399 to schedule your free consultation with Attorney Nick Nemeth.
