IRS Compromise Settlements: Should They Be Banned?

Is it just me? Every time I see or hear one of those commercials from some “ex-IRS agent” that is boasting about getting their clients off the hook for thousands or millions in overdue taxes, it ticks me off!


Every time the IRS lets one of these people off, it only increases the amount that legal abiding, taxpaying citizens like you and I must pay.

Granted, you can’t get blood from a turnip, it may not be realistic for the IRS to get their full due at the moment but why should this mean that we let these taxpayers off for good?

If they owed these taxes as one point, why should this ever change. If they can’t pay now it doesn’t mean they can’t ever pay.

When you get behind on your mortgage, to prevent a default most mortgage companies are happy to tack the unpaid principle and interest onto the end of your loan. Why can’t the IRS do the same thing?

Currently to qualify for an Offer in Compromise and debtor must show they meet one of the three following conditions according to

  • Doubt as to Liability – Debtor can show reason for doubt that the assessed tax liability is correct
  • Doubt as to Collectability – Debtor can show that the debt is likely uncollectable in full by the IRS under any circumstances
  • Effective Tax Administration – Debtor does not contest liability or collectability but can demonstrate extenuating or special circumstances that the collection of the debt would “create an economic hardship or would be unfair and inequitable.” This Offer in Compromise program is available for any taxpayer, but is primarily used by individuals that are elderly, disabled, or have special extenuating circumstances.

If there is doubt about the debt it simply needs to be cleared up. Through whatever means if a person doesn’t owe the money they shouldn’t have to pay a penny let alone settle for an offer in compromise.

While many debts can be discharged in bankruptcy tax liens, school loans and alimony cannot. If tax liens cannot be discharged how does it make sense that a person can negotiate a lower tax liability?

In the last case, economic hardship, our government doesn’t need to be cruel. Each citizen is provided a right of life liberty and pursuit of happiness. Nowhere does our constitution guarantee luxury. If a person owes a debt, once basic needs are covered every other penny should go to paying back their debt to we the people!

What do you thing about the settlements, should they be allowed?

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