IRS Tax Debt

The IRS recently has issued a consumer alert notifying taxpayers to be wary of companies

claiming that IRS tax debt can eliminate for as little as pennies on the dollar with the OIC (Offer in Compromise) Program. This programs offers a way for the indebted tax payer to create an agreement with the IRS to lower or eliminate their tax debt. The Internal Revenue Service can negotiate, or compromise, with tax payers to lower their federal tax debt for less than is owed.

According to Mark W. Everson, the IRS Commissioner, the program only applies to a small number of taxpayers, and unscrupulous companies are incorrectly targeting taxpayers with extensive IRS tax debt. The goal of these companies is to convince ignorant taxpayers to pay them to file an OIC application with the Internal Revenue Service. However, for the most part, these individuals have no chance of qualifying for the program. He is trying desperately to get the message to taxpayers to avoid being duped by these companies and do research to ensure they qualify for the OIC program.

To qualify for the OIC program, taxpayers must exhaust all other payment options, including monthly installment plans. To find out more about the different payment options, visit the IRS website and review Publication 594, known as the IRS collection publication. This site contains all the forms you need as well as explanations of and instructions to fill out the forms. After reviewing this information, you should see if you qualify for the OIC (Form 656) program or the Installment Agreement Request (form 9465).

If you find you qualify for the Offer in Compromise, there is a $150 fee that you must submit with your application. However, those with low incomes or with doubt about liability may qualify for an exemption. If you are an individual who qualifies for the poverty guideline exception, you have to submit Income Certification for the OIC Application Fee(Form 656-A) to verify your eligibility.

You can print the tax forms you need from the IRS.gov website or you can order the forms you need by calling 800-829-3676. Either option is free to the public. However, if you have trouble understanding or filling out the forms for the Offer in Compromise program, you should consider consulting with a professional tax expert to make sure your OIC form is correctly filled out and submitted to the right department.

IRS Tax Debt

By: Steve Patterson

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