With the tax deadline nearly here, many are scrambling to find ways to pay the IRS if they owe. But taxpayers should be aware of those promising to help settle or dramatically lower their debt.
The dreaded April 15 tax filing deadline is right around the corner. It can be even more painful if you owe the IRS. While the IRS offers options for repayment, many chose to hire someone to resolve the debt.
"I know you hear the ads all the time on TV that they can settle for pennies on the dollar. This is true in some cases," said Brenda Owens, an enrolled agent with B-CS Tax Group.
She represents clients before the IRS. She says one way to settle your debt is with an offer and compromise agreement. But that doesn't work for all.
"To settle your debt with an offer and compromise is a great way to settle if you meet all the criteria and that means you have no assets and very little income," said Owens.
Owens says if you owe a small amount, then you won't qualify for the compromise and if you have a job and assets, you may not be able lower your debt, and you'll have to arrange for installment payments. Only a CPA, attorney, or an enrolled agent can represent you before the IRS and you want to be sure you trust them to handle your tax matters.
"A company that's known for being reliable and preferably somebody that I've had a recommendation for or somebody that's been around for a long time," said Gerrit Westover, a College Station resident.
Owens also says that requesting an extension for filing your taxes does not cover paying what you owe. You'll need to set up payment arrangements and be prepared to pay penalties and fees.
You may have to pay a tax representative an upfront fee and those can get pretty pricey. Owens also says you should know for sure how much, and if you're saving money. And remember the age old saying.
"If it sounds to good to be true, it probably is," said Owens.