by JQ Adams

Created on: April 05, 2010   Last Updated: April 15, 2010

A multitude of new commercials advertising companies that offer tax debt relief have been appearing on many television stations during all hours of the day.  These commercials claim that these companies will be able to dramatically reduce the amount of money that a person will have to pay to settle a state or federal tax debt, even if the debt is years old.  In many cases, the claims that are made in these commercials seem too good to be true and people have good reasons to be wary of the promises made in these commercials.

Promises Of Access To Tax Professionals
Although there are thousands of professionals whose business is to advocate for lower tax bills on behalf of their clients, in many cases the “professionals” that are working for these companies have had brief training and very little experience in actually negotiating with the IRS for tax relief.  Instead of providing the legal and financial tools needed to lower the tax bill by any significant amount, these firms are attempting to secure an Offer In Compromise (OIC) which is a settlement agreement between a taxpayer and the IRS for accounts that the IRS agents believe may be uncollectible any other way.  The IRS issuing an OIC for a tax debt is a long shot for most taxpayers.

Promises Of Settling For Pennies On The Dollar
Many of the commercials for tax debt relief that appear on television show individuals that had thousands of dollars in tax debt but settled their accounts for little or nothing at all.  In reality, this is extremely unlikely.  If the IRS determines that you have the means to pay the amount of your tax debt, they will use every means at their disposal to collect the entire amount of the debt.  This can include liens against your property, wage garnishment, and other actions to collect the money before it ever enters your hands.  The IRS can afford to wait to collect the entire amount of the tax debt and will often choose that collecting the entire amount over a number of years will be more beneficial than settling for a lower amount today.

Claims Of Effectiveness
Many of these commercials claim that the tax professionals at these companies can succeed where others have failed and get you the results that you desire.  These companies charge upfront fees of hundred or thousands of dollars for the employees of the company to take a look at your tax debt situation and often charge more fees for the work that they are claiming to perform on your behalf.  In most cases, the only way that the IRS is going to reduce your tax debt is if there is no possibility of you being able to repay the full amount of your tax debt anytime in the future.  Hiring a tax professional from one of these companies for hundreds of dollars is not a good way to prove to the IRS that you do not have enough money to pay your tax debt.

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