We've all heard the ads blaring on TV and radio..."You can settle your back IRS debt for pennies on the dollar!"
Maybe they even include some testimonials of someone who owed an insane amount of money, only to settle if for $100.
What gives? Is this fact or fiction?
The answer is: it depends.
There are definitely some people out there who qualify to settle their back debt with the IRS for far less than what they owe. I've helped people do it before!
The kicker is that this option typically only exists for people who are very low income, who have health or other verifiable personal issues, or who have extreme special circumstances.
Obviously, the vast majority of people who have IRS problems do not fall within that category!
For most people, therefore, "settling for less" is not a realistic outcome.
"Well RC, if I can't settle for less, then why would I even need your help in the first place?"
I get this question from time to time. And the answer is: maybe you don't!
If your situation is that you owe the IRS a relatively small amount of money (say less than $15,000), just give them a call and put yourself on a payment arrangement! Pay them a couple hundred bucks a month and be done with it.
But if your issue is more complicated, such that you owe them tens of thousands--if not hundreds of thousands of dollars (and maybe you owe the state Department of Revenue too), if you have unfiled tax returns, if this has been going on for years without a resolution and just seems to keep getting worse, you basically have 2 options:
Option #1 - Try to figure it out yourself. Be prepared to spend tens of hours on hold (having your call disconnected repeatedly). Be prepared to spend hundreds of hours on the IRS website or at your local law library trying to figure it out. And then when you finally DO get in touch with someone at the IRS, a tired IRS agent (who has already listened to a dozen other sob stories today from other taxpayers) flatly tells you that your options are to basically start selling your assets, pay them thousands that you don't have (but according to some funky IRS formulas, you supposedly do), OR levies and garnishments will start in 30 days.
Option #2- Talk to a professional. If you are a real estate professional who is serious about growing your business and solving this problem once and for all, why bother to take the penny-wise, dollar-foolish approach of making this a failed DIY project? There are better options available than starting to sell your house and your car and basically reducing yourself to living in poverty in order to pay back the IRS...IF you know what to do. That is where a professional can help.