I would like to see a comparison between the number of IRS income tax liens in 2009 and 2010 and the numbers from just a few years ago, 2005 and earlier. I will bet everything I have that there is a staggeringly sharp spike in the numbers of tax liens against people that owed Federal and State taxes in the last two years since the Great New Depression (the Recession) has hit our economy like a jackhammer. Because of the steep rise in taxpayer delinquencies and the aggressive stance of the government, many income tax services providers have sprung up that promise to lower or eliminate your delinquent tax debt, fix your credit, and remove any liens. Obviously, doing this is not easy and takes some experience and expertise in order to do it successfully. The government is becoming less interested daily in bailing out financially strapped debtors than ever before, even though it was their failed policies that have brought the citizens of this country to their raggedy, torn knees.
Depending on your current financial position and condition however, an offer in compromise may be just the ticket for you the debtor to get out of debt and possibly restore your credit rating to boot. If you dont have a job you can just about forget negotiating with the IRS. They will not do an offer in compromise, no matter who is handling your income tax services negotiation if you can not show a steady income. This is because it costs the government too much in priority and registered mail costs to set these things up only to have the debtor fail to make their arranged payment.
The way an offer in compromise is supposed to work, and the way that it worked in the past was that the debtor would fill out a series of forms, provide some proof of income, a hardship letter, and other supporting documentation. The debtor would request that the size of their debt be reduced. In the past the IRS was keen to give out settlements of pennies on the dollar. That means that if you owed $10,000, you could expect a settlement of $1000 or less. Today, however, the IRS looks very closely at each and every application and will try and get the maximum amount from each debtor. This is because the country as a whole is practically broke (just check out the size of the national debt).
Some companies can in fact help you to get a reduced amount via negotiations with the IRS, but you will be placed under review and you cannot falsify information to the IRS. This is the equivalent of perjury and is punishable as a felony. In the past, the IRS would not look too closely at your proof, relying more on the letters and documents provided by the income tax services provider employed. These days are gone and with todays ever increasing roster of tax debtors, the percentage of those granted a reduction will continue to decrease.