Okay watching Monday Night Football tonight there was a commercial for (I don't remember the exact name of the company now) but basically it was something like Absolute Tax Relief. What they are saying is that thier lawyers can negotiate with the IRS to redues what they owe to the IRS for taxes and backtaxes.

The examples of cases they had was one guy owed about $148,000 and settled for only having to pay something like $14,500. Another one was the owed $98,000, and settled for $4,789.

My question is:

1. How in the heck does this work? (I am curious and not going to use such services)

2. Is it just me or does this just tick you off?

I mean I file my taxes on time and pay them right away if needed to, and these people get off paying a very small fraction of what they owe. Doesn't this hurt our countries budget by not having money there that was supposed to be there. I know this amount isn't going to save the country or its budget. The part that really ticks me off is when they actually have the people on there that saves thousands they have this little sh#t eating grin on thier faces. It makes you wonder what major purchases (boats, cars, condos, vacation homes, etc.) they bought with the money they were should have been saving to pay thier taxes.

Just to let you know I am not big into government and understand how things work with taxes and things like this, so please take that into consideration to my simple questions and don't blast me.

Oh yeah thanks for letting me vent, but this just bugs me on how this works.

1. No idea how this works
2. It's not just you, it ticks me off too.

I wouldn't be surprised if this was some sort of scam. Kinda like the debt relief commercials. They might be able to help you out with refiling and some tricky accounting or whatever, but I don't see you getting out of $135K in taxes.

This is a program that the IRS started long ago, in effort to get the ones that owe these large amounts paying again.

The scam is, you can do this alone or with your CPA, the ads imply that you NEED them to get this done.

Compromize and Settle, you agree to pay x amount to clear your debt, the catch is that you have to stay paid up for the following 5 years, no exceptions, or the entire debt returns back to you.

Consider that for most that do this, the actual tax they owe is small compared to all the interest and penaltys that compound over the years.

Before I was 21 I worked for a buisness that didnt do withholding, being young and stupid, I spent the money. I filed my taxes but had no money to pay them, I set up a pay program with them to pay monthly, well like many I fell behind and with the interest and penalty this whole thing went from a tax debt of 3k to 18k, for these few years of taxes. This kept my credit score low and basicly kept me from the hopes of many to become a home owner.
I went threw this process and offered the original 3k. sent the check they cleared the debt and I've been on my feet since.

Hate me if you will, I could care less, Its too bad that some have to stoop to make you believe that you need a Lawyer to get this done

I think these commercials are very misleading. Like Minneman said they are generally just settling for the amount that was originally owed and the IRS is forgiving penalties and interest. They would rather get the original debt paid off instead of probably not getting any money at all.

I believe most of these debts come from failed small businesses. Its not a case of Lazy Joe Schmoe just deciding he doesn't want to pay taxes this year. If the IRS sees that someone intentionally dodged his tax duty I highly doubt that they are going to give him a break. Most likely he'll be paying the debt off in jail for a few years.

I think we need to remember that the IRS has the ability to look at each case individually and determine a fair resolution. I would rather see the IRS settling with people for the orginal amount owed then holding out for 2-3 times the original amount which in many cases could never be paid off. Getting the debt resolved gets the IRS their money and gets the person back to the point where he can own a home and contribute positively to the economy.