by Jay Freeborne , Enrolled Agent
September 17, 2015

With about 170 national "tax relief" or tax resolution companies vying to solve your tax problem, a lot of interesting theories and myths get rolled out to appeal to your base senses. From the Offer in Compromise program being for everyone to installment agreements that freeze penalties/interest, there's a lot of B.S. out there that we are going to try to uncover in today's blog post. Many of these "myths" get legs due to the folks spouting them not being licensed tax professionals but rather myth-loving sales people.

1. "Freezing Penalties/Interest" We heard this myth from a tax-lien calling outfit in Colorado. Somehow they could set up an installment agreement that freezes future penalties/interest. Ladies and Gentleman that is called "Bankruptcy Chapter 13." Not something that an accountant is going to do for you. However - your tax professional can remove penalties and interest if the case is made correctly.

2. Having Access to Special Offices of the IRS. It seems like a good lark. We can help you because "we know the IRS staff people really well and have special access to certain offices..." While knowing people at the IRS some times smooths the cases through, we are treated pretty much equally by IRS and State agencies and really can't "schmooze" some special outcome due to "knowing someone." However - WATAX.com once did get a referral from an IRS agent who respected our work.

3. "The Offer in Compromise Is Program for Everyone" If you have the ability to pay the IRS back thru liquidation of assets and/or payments, you are NOT going to qualify for an Offer in Compromise.

4. "Get Penalties Off First" Penalty waivers are achieved by demonstrating good behaviors such as filing and paying your most recent tax years and coming to a payment plan with the IRS. However, you can't ask for penalties off UNTIL you have built some "good will" with the IRS.

5. "Having Equity in House is an Offer in Compromise Deal Breaker" Pre-2008 Crash, it is probably true: home equity was a deal-breaker for getting an Offer in Compromise. But post-recession, lending terms are much stricter and if you can get two "loan denials" showing you can't tap your equity - this could mean you qualify for an OIC much lower than your home equity.

For 30 years, WATAX has been solving every kind of tax problem. Call us at 1-888-282-4697 or email us a description of your tax issue and we'll contact you.

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