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Tax Counseling

A Rational Approach to Tax Debt

Tax Counseling is NOT Tax Debt Relief Because it actually works
— Brian Stephens, customer (Groves, TX)

Tax Counseling

If you are currently facing a demand from the IRS for tens or even hundreds of thousands of dollars, the time for easy fixes is generally over. Now’s the time for serious advice and counsel from a licensed professional. The very last thing you need at this point in your journey are empty promises and sales spin. You need specific, realistic, timely options along with honest answers about what’s possible and what’s not. You should be aware that in almost all cases your options will not include filing an Offer In Compromise (OIC) and will not include tax debt forgiveness. That is a fact, and there is no way around that fact.

Shooting straight with you and actually getting your tax problems solved is our business model at Maui Tax Counseling. No nonsense, no hyperbole, no collecting your credit card number. If you are hoping to ‘have your tax debt erased’ or ‘pay pennies on the dollar’ you are very likely to be disappointed.

“having Your tax debt erased”

As you will learn, having all or part of your tax debts forgiven (compromised) is certainly no Unicorn. But it’s rare. Filing a fully compliant Offer in Compromise on Form 656 with the IRS is a complex and expensive procedure. Unfortunately the majority (3 in 5) taxpayers who file OICs - which can cost up to $10,000 - are rejected. Many of these expensive, useless OIC filings are prepared incorrectly. Many should have never been filed in the first place.

A competent professional will not file an OIC unless SHE IS nearly certain of ITs acceptance.

While it is true that people sometimes get released from tax debt, CPAs and lawyers with decades of tax experience know getting released from “thousands in IRS debt” seldom actually happens. Tax debt forgiveness under the individual programs known collectively as the Fresh Start Initiative granted around 24,000 tax payers over $250 million in debt forgiveness in fiscal 2018. These highly fortunate people were among approximately 10 million delinquent tax payers in 2018. Less than 3 in 1,000 got any of the Fresh Start Program forgiveness central to tax debt relief marketing.

If you’re eligible for any of this relief rest assured Maui Tax Counseling will get it for you.

Filing Offers in Compromise is the single most expensive service we offer at Maui Tax Counseling. Frankly, we don’t file that many because we never recommend our clients incur the expense of an OIC unless we are 95% certain it will be accepted.

If you aren’t eligible for primary income tax debt forgiveness through an OIC we can explain other options which may provide more limited relief. Reductions in your liability are possible using innocent spouse relief, penalty abatement, and other less common Fresh Start programs like “Effective Tax Administration” (hardship)

tax debt forgiveness facts:

  • Most Offers in Compromise (OIC) made to the IRS are rejected.

  • The average primary tax debt forgiveness is approximately $10,000.

  • There are approximately 10 million delinquent taxpayers.

  • Fewer that 25 thousand of those ten million received debt relief through the OIC process.

  • Fewer than 3 in 1,000 delinquent taxpayers are granted tax relief using Offers in Compromise.

  • You cannot seek tax debt relief unless and until all of your outstanding tax returns have been filed.

  • The IRS granted over a quarter billion dollars in tax forgiveness in 2018.

  • The IRS collected over fifty-five billion dollars in delinquent taxes/ penalties/interest in 2018.

  • Very few taxpayers are even eligible to file OICs. Even taxpayers with negative net worth may not qualify.

  • There is typically little negotiation in these matters. Most debt is forgiven according to precise IRS formulas.

Tax Debt Relief companies are an excellent way to throw money down the drain.
— Mark W. Lee, CPA