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How do Tax Settlement Companies Work?

Tax Settlement

Paying off back taxes can be nearly impossible for an individual who is struggling financially. The IRS has a tendency to be fairly aggressive in their collection tactics. These horror stories intimidate many people into thinking that they have no hope of paying off their tax debt. This is where tax settlement companies can be a priceless asset to you.

A tax settlement company is made up of tax professionals that specialize in helping people negotiate settlements with the IRS. These tax professionals are typically experts in understanding how the IRS operates, as many of them are former employees of the IRS. A tax settlement company will go to the IRS on your behalf and try to come up with an acceptable Offer in Compromise so that you can pay off your tax debt. These negotiations are an attempt to get the IRS to collect a much smaller amount of taxes than is actually owed.

Tax settlement companies will take your financial information and records and demonstrate to the IRS that you are incapable of paying the current IRS tax debt. The IRS will want to make sure you do not have the money to pay the debt or any type of asset or property that could be used to pay off the IRS tax debt. This type of company will sit down with you and help you prepare all of your forms for the Offer in Compromise and then they will work toward getting an offer that the IRS will accept so that you can pay at least part of your debt.

The tax settlement companies will then go through and take your information and explain to the IRS that you cannot pay the IRS tax debt. The reasons for not being able to pay the debt are ultimately the deciding factor for the IRS about whether or not to accept your offer. Only 15% of offers are accepted, so do not expect your first offer to be accepted right off the bat. You must continue to consult with your tax settlement company and submit different offers to see if the IRS will accept one.

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