Truth about IRS Tax Debt Reduction Program

Last updated on November 8, 2021

Offer in Compromise program of the IRS has been much abused because it is the only way to reduce tax debt. Many taxpayers get duped into thinking that their tax debt will be reduced substantially or even reduced to zero by the tax service that promises to do so. Fraudulent tax services that sell dreams to taxpayers get thousands of dollars in fee, but it is taxpayers who end up getting nothing.

Fraud in the Name of Tax Debt Reduction

Tax debt reduction can tempt anybody who has back taxes to pay, and that is what fraudulent tax companies use to dupe taxpayers into hiring their services. That is a marketing tool they use to attract taxpayers. Once a taxpayer has hired their services and paid a hefty upfront fee, they do little to nothing to resolve their tax debt.

Scam tax services use Offer in Compromise, a tax debt reduction plan of the IRS, to trap taxpayers. To stay safe from fraudulent tax companies, taxpayers must never hire a tax company that promises substantial tax reduction without knowing the particulars of their case. Scam companies always charge a substantial amount as upfront fee, and may also charge hidden fee.

The Truth about Offer in Compromise

Offer in Compromise is an IRS tax debt payment plan that reduces the tax debt of those taxpayers whose financial condition is such that they are unable to pay their entire amount of tax debt. The IRS takes into account the assets and liabilities of a taxpayer before qualifying them for Offer in Compromise.

The tax debt payment plan popularly known as ‘pennies on the dollar’ aims at reducing the tax debt amount of taxpayers who can barely satisfy their basic living needs of food, shelter, clothing, transportation etc. If the IRS, after accessing the financial condition, finds that the taxpayer has no hope of an increase in income or assets, it will take what it can of the total tax debt amount. Qualifying for Offer in Compromise is difficult. Only a few taxpayers qualify for it because of its strict qualifying factors.

Qualifying for Tax Debt Reduction Plan

The only way to qualify for Offer in Compromise is to show the IRS that the taxpayer does not have the money to pay the entire amount of tax debt. For best resolution of a tax debt problem, it is advisable to hire services of an honest and legitimate tax service.

It is important to hire a tax service that has the experience, the expertise and the will to provide taxpayers with the best resolution to their tax problems. To help taxpayers decide on which tax service to hire, we have reviewed some of the top tax services in the country. Taxpayers can take a look at our ratings and reviews of top tax resolution companies. This first step in the resolution of tax debt is the most important.