Fed income taxes. . .

[FijiTime]

Does anyone know how to go about dealing with the IRS? I had a mistake on my 2007 income taxes and recently got a notice that I owe $6500 which sadly might as well be $650,000 right now.

I know I can get into a payment plan and stretch that out, but it's still a pretty painful subject because I'm already living on a tight budget. Does anyone have experience with those pay penny's on the dollar offers from TV?? Or some friendly advice on managing the IRS?

I just had a CH7 discharged a few weeks ago, and while I've been able to save some money I feel like a refugee. I have to find somewhere to live by June and I only have about $1000 left in the budget without lowering that further to accommodate an IRS payment. I've already found looking for a place to rent with a $1000 budget, a siberian husky, and a bankruptcy is pretty difficult...

[southernbelle]

I also owe the IRS and did extensive research on JK Harris, Ronnie Deutch and others like them and found that they are scam artists. It's not worth it to deal with those pennies on the dollar places because they overpromise, charge high fees and don't deliver. Most folks that used those guys say that the money they used to pay them could have been used to negotiate with the IRS. (Check it out yourself by Googling complaints against those companies.)

Also if you surf the IRS's website on OIC's and IA's it gives the impression that the IRS HATES those types of places which is why they changed the rules on submitting OIC's and now require a payment upfront.

I chose to hire a local Enrolled Agent that retired from 20 years of service with the IRS. I love the fact that I can go to his office and talk to him face to face as opposed to dealing with someone via telephone, email or fax. If you don't want to enter into an Installment Agreement with them, try using someone local to submit an OIC. A free consultation with and EA or CPA will tell you what your options are. Good Luck.