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Trying to clean up tax debts

Reader who owes IRS about 30G wants to clear the slate.



For 10 years, I was an independent contractor. I got 1099s every year. Unfortunately, I got into some severe substance-abuse problems, and I got behind on my taxes. I did file the returns, but I failed to pay both the income tax and self-employment tax. I now owe the IRS about $30,000. I'm now clean, and I'm trying to get my life together and clear up the record from my past. I see ads on TV for these guys who say they can clean up my tax debts for pennies on the dollar. Are they really legit? Can I do the same thing on my own? I have a steady job where taxes are taken out regularly. I would deeply appreciate any advice you can offer. You helped my brother about five years ago, and now it's my turn.

WHAT HARRY SAYS: The IRS recently simplified the procedures for Offers in Compromise. This is what the TV guys will do. The only advantage they have over you is that they know the ropes. You can do it successfully yourself. Get a Form 656 from the IRS and the instruction booklet. Base your offer on the fact that you cannot afford to pay the amount due. Try your offer at $5,000. You can even arrange a series of partial payments. I hate to stir the pot, but are you up-to-date on your state and city taxes?