Don’t pay firm to get IRS deal on tax debt

and turn to what they think will be a savior.

“Can’t pay your taxes?” an announcer on the radio asks. “Got $10,000 or more in tax debt? We can help.”

Don’t make the call. Don’t fill out the online profile. If you do, you’ll probably end up paying hundreds if not thousands of dollars to the company for something you could have done yourself. Or you might get no help at all, as some people who’ve used such services report.

What tax debtors don’t know is that the “pennies on the dollar” deal the companies claim they can get involves what’s called an “Offer in Compromise,” or OIC. Although this is a legitimate program offered by the IRS, it’s intended to help folks who are so financially down that it’s unlikely the agency could collect all that the government is due.

The tax-debt relief companies often don’t adequately disclose that getting an OIC accepted is a Herculean process. To qualify, the IRS will look at your income, expenses, ability to pay and, most importantly, whether you have any assets — including equity in your home.

You can apply for an OIC yourself. At irs.gov, search for the “Offer in Compromise Qualifier” tool to see if you’re eligible. You’ll see that the first few questions could eliminate a lot of folks. You can’t be involved in an open bankruptcy proceeding. You have to have filed all required federal tax returns.

If the results indicate that you aren’t eligible, contact the IRS anyway. You can still make a case that you have extenuating circumstances — such as a serious illness — that prevent you from paying your taxes in full.

The other option is to ask for a payment plan. You can arrange to make monthly payments for up to six years if you owe $50,000 or less in combined taxes, penalties and interest, and have filed all required tax returns.

Use the Online Payment Agreement tool at irs.gov. If you don’t have internet access, file IRS Form 9465 “Installment Agreement.”