IRS Tax Settlement Attorneys: What You Need to Know

IRS Tax Settlement Attorneys: What You Need to Know – If you owe taxes to the IRS and are unable to pay them in full, you may be looking for a way to settle your debt for less than the amount you owe. One option that you may have heard of is hiring an IRS tax settlement attorney to negotiate an offer in compromise (OIC) on your behalf.

An OIC is an agreement between you and the IRS that allows you to pay a reduced amount of your tax liability and have the rest forgiven. However, before you decide to hire an IRS tax settlement attorney, there are some things you need to know.

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What are the benefits of hiring an IRS tax settlement attorney?

An IRS tax settlement attorney is a legal professional who specializes in resolving tax disputes with the IRS. They can help you with various aspects of the OIC process, such as:

Evaluating your eligibility for an OIC based on your income, expenses, assets, and tax liability
Preparing and submitting the required forms and documentation to the IRS
Communicating and negotiating with the IRS on your behalf
Advising you on the best course of action and possible outcomes
Protecting your rights and interests throughout the process

Hiring an IRS tax settlement attorney can increase your chances of getting an OIC accepted by the IRS, as they have the knowledge and experience to deal with complex and often changing tax laws and procedures. They can also save you time and stress by handling the paperwork and communication for you.

What are the drawbacks of hiring an IRS tax settlement attorney?

Hiring an IRS tax settlement attorney is not a guarantee that you will get an OIC approved by the IRS. The IRS has strict criteria for accepting OICs and only approves them when they believe that it is in their best interest to do so. According to the IRS, in 2020, they received 54,225 OIC applications and accepted 18,770 of them, which is a 34.6% acceptance rate. Therefore, even if you hire an IRS tax settlement attorney, there is no guarantee that your OIC will be among the accepted ones.

Another drawback of hiring an IRS tax settlement attorney is the cost. IRS tax settlement attorneys typically charge a flat fee or a percentage of the amount saved through the OIC. The fee can vary depending on the complexity of your case, the reputation of the attorney, and the location where you live. According to some sources, the average fee for an OIC ranges from $2,500 to $6,000. This fee is in addition to the $205 application fee and the initial payment that you have to submit with your OIC application. Therefore, hiring an IRS tax settlement attorney can be a significant expense that you have to consider before making a decision.

What are some alternatives to hiring an IRS tax settlement attorney?

If you are not sure whether hiring an IRS tax settlement attorney is worth it or not, or if you cannot afford one, there are some alternatives that you can explore:

You can try to negotiate an OIC on your own by following the instructions in Form 656-B, Offer in Compromise Booklet PDF. However, this option requires a lot of research, preparation, and patience, as you will have to deal with the IRS directly and comply with their rules and deadlines.
You can seek help from a Low-Income Taxpayer Clinic (LITC) if you meet their income eligibility guidelines. LITCs are independent organizations that provide free or low-cost legal representation, education, and advocacy for taxpayers who have disputes with the IRS. You can find a local LITC in your area by visiting this website.
You can contact a Taxpayer Advocate Service (TAS) if you are experiencing economic hardship or other problems with the IRS that affect your ability to pay your taxes. TAS is an independent organization within the IRS that helps taxpayers resolve their issues with the IRS. You can call TAS at 1-877-777-4778 or find a local office near you by visiting this website.

How to find a reputable IRS tax settlement attorney

Finding a reputable IRS tax settlement attorney can be a daunting task. Here are some tips to help you find a reputable attorney:

Research: Do your research and look for attorneys who specialize in tax law and have experience dealing with the IRS. You can start by searching online for tax attorneys in your area, or by asking for recommendations from friends or family members who have dealt with tax issues in the past.
Check credentials: Make sure the attorney you are considering is licensed to practice law in your state and is in good standing with the state bar association. You can usually verify an attorney’s credentials by contacting the state bar association or by checking their website.
Read reviews: Look for reviews and testimonials from past clients to get an idea of the attorney’s track record and reputation. Keep in mind that not all reviews are created equal, so be sure to read them critically and look for patterns or trends.
Schedule a consultation: Most attorneys offer free initial consultations, so take advantage of this opportunity to meet with the attorney in person and discuss your case. During the consultation, ask about the attorney’s experience, their approach to resolving tax issues, and their fees.
Trust your instincts: Ultimately, you want to work with an attorney who you feel comfortable with and who you trust to represent your best interests. If something doesn’t feel right during the consultation, don’t be afraid to keep looking until you find the right fit.

What to expect from the OIC process and how long it takes

The processing time for an Offer in Compromise (OIC) varies, but you can expect the IRS to take at least six months to decide whether to accept or reject your OIC. The process can take much longer if you have to dispute the examiner’s findings or appeal their decision. Most OICs take between 7 and 12 months to complete.

How to avoid scams and frauds related to IRS tax settlement

o avoid scams and frauds related to IRS tax settlement, you can take the following steps:

Be cautious of unsolicited contact: The IRS does not initiate contact with taxpayers by email, text messages, or social media channels to request personal or financial information. If you receive an unsolicited email or message claiming to be from the IRS, do not respond or click on any links. Instead, forward the email to phishing@irs.gov.
Verify the identity of the caller: If you receive a phone call from someone claiming to be from the IRS, be cautious. The IRS will generally first mail a bill to the taxpayer who owes taxes. If you are unsure if the call is legitimate, hang up and call the IRS directly at 1-800-829-1040 to verify the caller’s identity.
Be aware of common scams: Be aware of common tax scams such as phishing emails, phone scams, and fake tax preparers. You can learn more about these scams and how to protect yourself by visiting the IRS website.
Protect your personal information: Keep your personal and financial information secure by using strong passwords, being cautious when sharing information online, and monitoring your credit reports regularly.
Work with reputable professionals: If you need help with your taxes or settling a tax debt, work with a reputable tax professional or attorney. Make sure to check their credentials and read reviews before hiring them.

How an OIC affects your credit score and tax records

An Offer in Compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service (IRS) that settles a taxpayer’s tax liabilities for less than the full amount owed. An OIC may be a legitimate option if you can’t pay your full tax liability or doing so creates a financial hardship. The IRS considers your unique set of facts and circumstances, including your ability to pay, income, expenses, and asset equity.

While owing taxes to the IRS does not directly affect your credit score, negative marks on your credit score can have a lasting impact, making it more difficult to apply for a credit card, car loan, home mortgage, and more. When qualifying borrowers, lenders want to see a demonstrated history of fulfilled financial obligations—including your tax liability to the federal government

What to do if your OIC is rejected or revoked by the IRS

If the IRS rejects your Offer in Compromise (OIC), you will be notified by mail. The letter will explain the reason for the rejection and provide detailed instructions on how to appeal the decision to the IRS Independent Office of Appeals. You must make your appeal within 30 days from the date of the letter. If you do not make your appeal within 30 days, it will not be accepted.

To appeal a rejected OIC, you can prepare either a Form 13711, Request for Appeal of Offer in Compromise, or a separate letter with the following information: your name, address, Tax Identification Number, and daytime telephone number; a statement that you want to appeal the IRS rejection to the IRS Independent Office of Appeals; a copy of your rejected offer letter; the tax period(s) or year(s) involved; a list of the specific items you don’t agree with and a statement of why you don’t agree with each item; any additional information you want Appeals to consider; the facts supporting your position on any issue that you do not agree with; the law or authority, if any, on which you are relying; and your signature on the written protest, stating that under penalties of perjury, it is true, correct and complete.

In conclusion, Hiring an IRS tax settlement attorney can be a helpful option if you owe taxes to the IRS and want to settle your debt for less than the full amount. However, it is not a guarantee that you will get an OIC approved by the IRS, and it can be costly. Therefore, before you hire an IRS tax settlement attorney, you should weigh the pros and cons carefully and explore other alternatives that may suit your situation better.

IRS Tax Settlement Attorneys