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Those TV ads that promised to reduce what one owes to the IRS.

I see these TV ads all the time. What do they do? For example ...

I just saw a TV ad where this retired couple needed some funds for some reason, so the wife liquidated her IRA. This triggered a tax debt of $40,000 that the couple did not now have. Then, the implication is that the advertiser waived his magic wand and reduced the debt by 96% to #1400. With the couple sitting calmly and well dressed in front of the camera, the ad is trying to imply that the IRS simply forgave the debt without any consequences to the retired couple, and they are now able to enjoy retirement on a sunny beach in Miami.

If it were that simple, we'd all do it, right? So ... What does it take for the IRS to accept a reduced payment? One would think that the taxpayer would be at or near bankruptcy before the IRS would accept a reduced payment.

And since I see their ads all the time, what is the advertiser's business plan? Most of the ads say something like, "If you owe the IRS at lease ten thousand dollars ...". If someone owes the IRS $10k, where are they going to get the funds to pay these services?

Reply to
NadCixelsyd
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It's a scam. The victim pays fees to the advertiser up front, then the IRS comes after the victim anyway.

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Reply to
John Levine

I've often thought those claims are based on an initial, computer-generated letter from the IRS which may be wildly inaccurate. For example, taxpayer omits stock sales from a 1099-B on return, so IRS computer calculates tax due using zero basis. Once corrected, taxpayer may in reality owe much less or even have a refund coming, if the sales generated a loss.

Like almost all advertising, they are relying on FUD (fear, uncertainty, doubt) and the fact that many taxpayers can't be bothered to try to actually read their IRS correspondence (as evidenced by the number who don't even open the envelopes).

Reply to
Mark Bole

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