Tax free and proud of it

by on
in Small Business Tax

Frequently I see commercials on television featuring happy people telling how they saved thousands of dollars by hiring a company to help them settle their tax debt with the IRS for pennies on the dollar. "We owed the IRS $150,000 and only had to pay $10,000." "I settled my tax debt for a fraction of what I owed - and got to keep my house!" "I owed $80,000 in taxes - there's no way I could have paid that amount!"

Translation: These people earned money and reported it on their tax returns, and then got to walk away from the debt, while we honest taxpayers pick up the tab.

Furthermore these people appear on television and talk proudly about how they took advantage of the government (interestingly they don't mention the rest of the taxpayers who actually pay their taxes for them). And the companies that help them get away with not paying their taxes are hailed in the commercials as saviors.

What's wrong with this picture? Why aren't these people embarrassed about getting in over their heads, not being able to pay the tax that they owe on the money they earned? What kind of person goes on television and tells the viewing audience that they have essentially stolen from the American taxpayers and are proud of it?

Maybe I'm missing something here, but there are plenty of law-abiding citizens who make sacrifices every day so that they can pay their taxes. And there are plenty of taxpayers who make mistakes on their tax returns and end up paying a high price in penalties and interest on top of the tax that they owe. And there are even taxpayers who end up going to jail for not paying their taxes in full.

People who have the kind of financial troubles that cause them to file for bankruptcy protection don't get to avoid paying their taxes. But the people who hire the right lawyers can just walk away from a large percentage of their tax debt, and even make television commercials thumbing their nose at the poor fools who not only pay 100% of their own taxes but end up having higher taxes to cover the unpaid debts of those who don't pay.

We have the IRS's Offer in Compromise system to thank for this.

In some countries, not paying taxes is a capital offence. (http://www.accountingweb.com/item/104628). In America, such an event is a cause for celebration.

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