Tired of Running? Thousands of taxpayers all across America are experiencing issues with the IRS.
It's not a surprise considering how difficult is to understand all the rules and regulations of taxes.
But, the IRS is not known for their compassion and they believe that ignorance of the law is no excuse.
They'll do whatever it takes to get their money.
But what about settling? What about all of these commercials that say they can settle tax debt for "Pennies on the Dollar?" Keep reading and discover the truth about tax settlement and resolution.
Is It True? If you've seen or heard the claims about settling debt for "Pennies on the Dollar" you're probably wondering if it's too good to be true.
Well, the program that those commercials are referring to is the Offer in Compromise (OIC) Program.
It's a program that allows taxpayers to offer a lower amount than they owe to the IRS, and settle for a percentage of the original debt.
So, there is a program available, but the IRS does not "settle for pennies on the dollar.
In fact, more than 83% of OIC cases are rejected each year, mostly because of underhanded companies telling people that they qualify for something, that truly isn't the best for them.
Here's how the program really works: Do I Qualify? You can use a simple formula to see if you qualify.
It's actually the exact formula that the IRS uses when deciding if they will accept your case.
The first part of the formula is your monthly disposable income, or MDI.
Your MDI is the money you have left over each month after paying the bills.
So let's say after paying the bills each month you have $100 dollars.
The IRS takes that $100 dollars and multiplies it by 48 months (in this case $4800 dollars.
) The second part of the formula is any equity you may have in assets; homes, property, cars, 401Ks, etc.
Let's say the only equity you have amounts to $5000 dollars.
Here's what your formula would look like: $4800 dollars + $5000 = $9,800 What It Means: $9,800 dollars your offer to the IRS.
So if you owe less than $9800, an Offer in Compromise is not for you.
Because here's the bad news; let's say you owed the IRS $7000 dollars.
If you submitted an Offer in Compromise, and they saw the result was $9,800 dollars, you would then owe them $9,800.
It's pretty unfair, but the IRS hates it when their time is wasted.
So if you're thinking about an Offer in Compromise, speak to a qualified tax professional and see if you really qualify.
Who Do I Trust? In the industry of tax resolution, there are several companies out there who will tell you whatever you hear just to get your money.
The biggest rule is this: never let someone tell you that you qualify before they ask you about your finances in detail.
Make sure you're speaking with a company who has good ratings with organizations such as, the Better Business Bureau, State's Attorney General, and Dun and Bradstreet.
The good thing is, now you have the formula so if someone tells you that you qualify for an Offer in Compromise, you can double check for yourself.
Now you have the smoking gun...
Use it!