Why are there so many tax relief ads?

Question

I've lived overseas for the last 7 years. It seems cable TV is now over run with adds claiming you can resolve your tax problems and pay less than you owe.

Answer 1

Are you talking about the "Offer in Compromise " mills-- "settle with IRS for pennies on the dollar."?

Most of these will take your money and do nothing ( or next to nothing) for you.

The IRS OIC program is intended for IRS's benefit before the benefit of the offeror. The purpose is to allow the government to collect the maximum amount they can in a reasonable amount of time.

Think of it this way: If I owed you $1000 and you know that I have a paid off car, a job, and a house, and I offerred you $500 to settle would you take it? of course not, you'd go to court, get a judgement & a writ of execution and garnish my wages to get the full $1000.

IRS ain't stupid! If the basis for the OIC is "doubt as to collectability, they take a hard look at the facts & circumstances of each case and if they can collect the full amount, they will not take a penny less. I have successfully compromised several clients owing over $100k fr less than $5k, but in each case their income was les than their living expenses and they had very little else of ANY value.

SO, these ads you see are little more than predators victimizing people who are already behind the 8 ball. If you think, based on the above, that you might have a case, do not use one of the "mills"; engage an Enrolled Agent or CPA who will review your case for free or for a nominal fee.

Hank Roitman, EA
Sacramento, CA

Answer 2

They seem to come out of nowhere the past couple of years.

I think a few companies realized how profitable it was and the word spread. These companies charge a huge fee and do very little work. Search "Ripoffreport.com" and you will see tons of complaints. Why the various Attorney's General haven't done anything to clamp down on these companies amazes me.