Associated Tax Relief

[Ivan Seeking]

So what is the deal with this?
http://www.associatedtaxrelief.com/

On their commercials they show people who claim they had drastic reductions in their tax debt. One says that he owed over $130,000 and had his tax liability reduced by over $90,000. What's with that?!?!?! Can I just neglect to pay my taxes and then go running to Associated Tax Relief to have my tax burden reduced? And why would people get such drastic reductions?

[mgb_phys]

Can I just neglect to pay my taxes and then go running to Associated Tax Relief to have my tax burden reduced? And why would people get such drastic reductions?

If you are rich enough yes.
Your team of lawyers goes to the tax man and says - we can tie you up for years in court while you try and find the details of all of the offshore accounts. Or we can offer to pay X, in cash right now.

Of course if you aren't rich then the boot is rather on the other foot.

[russ_watters]

This has nothing to do with being rich, it's the same as amy other debt collection plan, from credit cards to phone bills: creditors will settle for an amount equal to their calculated odds of getting paid.

[mgb_phys]

creditors will settle for an amount equal to their calculated odds of getting paid.
Logical intelligent creditors would - does this apply to the IRS?

[russ_watters]

Logical intelligent creditors would - does this apply to the IRS? Apparently so...

[Ivan Seeking]

I thought that even bankruptcy couldn't relieve a person of tax liability. Why would the IRS negotiate anything except a payment schedule?

[Proton Soup]

because sometimes businesses fail and people fall behind and can't catch up. if you keep punishing them, they will never recover and become a productive taxpayer again.

i hate the commercials for that company, tho. they look very scammy indeed.

[Ivan Seeking]

because sometimes businesses fail and people fall behind and can't catch up. if you keep punishing them, they will never recover and become a productive taxpayer again.

i hate the commercials for that company, tho. they look very scammy indeed.

Is that a requirement for tax relief - bankruptcy?

[Proton Soup]

Is that a requirement for tax relief - bankruptcy?

maybe? i don't know. maybe their receipts are just way down. what if the choice is either paying the full amount of the tax owed, or going bankrupt? what is in the best interest of the government long-term?

[dilletante]

As I understand it, the government will give deep discounts in rare cases but not if you have tangible assets that could cover your debt. You can't keep your vacation home and get a deal from the IRS at the same time. It also costs you $150 just to apply for a compromise. Here is a more detailed discussion:

http://moneycentral.msn.com/content/Taxes/P69849.asp

[Proton Soup]

that's why you keep money in UBS

[russ_watters]

Note, we had a thread on this subject two years ago when a similar issue made some news, the "outsourcing" of small collections: http://www.physicsforums.com/showthread.php?t=129293&highlight=tax+collections+agency

A relevant post of mine: Frankly, with the power the IRS has available, I don't see why they need collections at all: they are capable of simply garnishing the wages of debtors. Why don't they just sieze assets, Ivan? I don't know, but it would appear they don't.

[Ivan Seeking]

Note, we had a thread on this subject two years ago when a similar issue made some news, the "outsourcing" of small collections: http://www.physicsforums.com/showthread.php?t=129293&highlight=tax+collections+agency

A relevant post of mine: Why don't they just sieze assets, Ivan? I don't know, but it would appear they don't.

When I was just starting out in life, I got involved in a tax revolt and didn't pay taxes for a year. Not long after that I realized that I should just clear this up and pay the piper. So I went to the IRS, told them that I owed them money, and arranged a payment schedule. Note that I didn't get caught or audited; I just went to the IRS office and admitted that I hadn't paid taxes. Everything was now above board and I had a mangeable payment plan. The next week, without any notice or warning, they cleaned out my checking account. They did it again a month later.