Both Sides of Tax Responsibility

Have you heard that radio ad about the tax relief company starring Louie? A man identifying himself as Louie says that he did not pay his taxes for eight years and now he is in trouble with the IRS. No kidding?

Think of all the people who sweat over their taxes every year for fear of being audited. Actually, few people sweat over their own taxes. Less than half file them themselves, and three-quarters of those self-filers use purchased software. Nonetheless, very few are casual enough (or careless enough) to let it go for eight years. 

To be in this situation is slightly understandable for a small business operating on the edge of solvency with inexperienced entrepreneurs trying to keep up on all the paperwork, but Louie sounds like an ordinary individual who is now terrified that the IRS is coming to confiscate his house, his bank accounts and his car.

It’s a little hard to feel sorry for the guy. Everyone else is trying to be conscientious about the annual chore, motivated either by fear or responsibility. Do people like Louie just assume that the rest of us will take up the slack for him and his fellow scofflaws? 

Regardless of the circumstances, in rides that tax relief firm to the rescue. They will negotiate with the IRS and help reduce what he owes based on their experience and understanding of the various hardship and forgiveness programs. So the people that let it ride, if they qualify, pay the firm a fee and pay the government less than what they would ordinarily owe. What a sweet deal! And all the people harping on the issue of not paying “your fair share” are silent about these sorts of arrangements.

These firms, not just one or two of them but over 100 listed on this review website, are proudly advertising ways to not pay a fair share. And it ‘s not some philosophical fair share. It’s a reduction to “pennies on the dollar” from the actual calculation after taking all the legal deductions and exemptions. Where is the outrage?

On the other hand, part of their message if you find yourself in this situation is, “Don’t go it alone.” Don’t try to take on the IRS without an expert. On that point they are right. The government has unlimited resources. They can use both force of law and delays of the legal system and bureaucracy to take your possessions and bleed you dry on appeal.

IRS tactics can be similar to another program called civil asset forfeiture. (This information comes from a news article from Alabama where they tried unsuccessfully to change the law.) “Under civil forfeiture, the government may take someone’s property as soon as they are accused of a crime, without that person having been convicted or, in some cases, even charged.” Suspected criminals can lose cash and physical assets without due process. “Even when charges are dropped or the accused is found not guilty, those accused often find it difficult to get their property back. Some never do.”

So whereas I can look at Louie and people like him and despair over their lack of responsibility – there must be a healthy number of them to keep 114 tax relief companies on the list in business – I can also see the necessity of such businesses to protect citizens from a likely abuse of their rights anytime they are even accused. If everyone in America was conscientious about filing honestly and on time, it would remove the need for these firms to exist, but it wouldn’t eliminate the threat from a heavy-handed government agency in this and other areas.