Do I Need a Lawyer for My Tax Debt Relief or Can I Set It Up Myself?

If your wages were garnished or you owe the IRS back taxes, it can feel like a nightmare. Should you contact the IRS yourself or hire a tax attorney? Here are a few points to consider with both options to help you decide.

Should I Contact the IRS myself?

How Contacting the IRS Can Help You

If you’re going to contact the IRS, you might want to set up an offer in compromise (OIC). You only pay a percentage of the total tax debt you owe. People do this if they experience severe financial hardship.

You can fill out an IRS offer in compromise form, send the IRS documentation proving your debt’s validity, and set up a payoff amount. You might want to use a tax debt relief service or attorney and we’ll explain why in the next section.

How Contacting the IRS Yourself Can Work Against You

When you contact the IRS, all conversations are recorded. People behind on bill payments and debts can make the mistake of lying to get leniency or an extension, but recorded conversations can work against you.

For example, you tell the IRS you were out of work last year. They then ask you to send all your financial records, bank statements, and bills that show you’ve received income, or they find hidden assets you didn’t disclose.

Why You Might Not Want to Contact the IRS Directly

People think they’re only paying the $186 application fee when they contact the IRS directly, but there are other fees and points to consider:

  • You have to submit all banking statements and bills to the IRS
  • All forms have been filled out correctly and truthfully
  • If your application is denied, you only have 30-days to file an appeal

And there’s more money you need to send the IRS in addition to the $186 fee.

When you set up your offer in compromise, you will have to propose your own settlement terms as lump sum payments or installment payments. This is where it “gets tricky”.

You have to set up terms the IRS will accept. You then have to include monthly payments you can afford and you have to send the first payment with your application.

Lump Sum Payment Example

If you owe $50,000 in back taxes, but you can only pay $10,000 and want to pay a $2,000 lump sum (20 percent), the offer can still be rejected. Based on your income, the IRS might determine that you can pay more.

Installment Payment Example

If you owe $50,000 in back taxes, and set up installment payments of $10,000, the IRS may/may not accept it. If you estimate $10,000 over 5-years, that’s $167 every month and you can’t miss any payments.

Should I Hire a Tax Debt Attorney or Tax Debt Service?

Hiring a tax debt attorney or tax debt service can be more beneficial because while you have to pay more, they can negotiate better terms for you. They know what the IRS typically accepts for offers in compromise.

A tax debt attorney or tax debt relief service can:

  • Help you prove reasonable doubt to the legitimacy of the tax liability, doubt to the collectibility of the debt, and prove your financial hardship
  • Help you negotiate better settlement terms instead of you “guessing”
  • Help you get wage garnishments removed and stop collection proceedings and help with appeals if the IRS rejects your offer in compromise

Conclusion

Ultimately, wage garnishments, IRS levies, liens, and collections can be nightmarish if you don’t know where to start. While you can reach the IRS yourself, if you’re unsure about setting up offers in compromise and you don’t want to “guess” at an offer that might be refused, use a tax debt relief service experienced in negotiating terms with the IRS every day. Contact Offer-In-Compromise for tax debt relief help today.