Settle your tax debt for pennies on the dollar!

As a tax guy I sometimes encounter people on the edges of civilization who want to rejoin us. They are deeply in tax debt. They hide away as the debt builds up. Tax debt is almost as bad as credit card interest, but unlike the credit card companies, the government does offer a way out. It’s called “offer in compromise,” or “OIC.”

I’ve done a few of those, but I don’t seek them out. The process is long and hard, and if the taxpayers are young and have income potential, the IRS OIC people will indeed behave like credit card companies. They can be assholes, and will lock them into installment arrangements where interest and penalties continue to accrue while payments just barely eat away at the underlying burden. They are better off in the underground economy.

On the edges of this fray are sociopaths, the predators who dominate our society. These are the people who slap us around with their invisible hands. These are the “entrepreneurs” that right wing economists deeply admire. If you listen to talk radio at all, you will hear ads for companies that will settle your tax debt for “pennies on the dollar.” IRS warns people to stay away from these Shylocks, but when people are scared and overwhelmed, the promises have far more appeal than common sense should allow.

Imagine that you are walking in the woods, enjoying the smells and plants and solitude, and then suddenly you realize you are being watched, and see a set of cold eyes. The hair on your neck stands up, a shiver goes up your spine, and fight or flight sets in. You have been stalked, and are in grave danger. You may soon die.

These predators are many of our “entrepreneurs”. They are not inventors or innovators, basement scientists or garage mechanics. They are sociopaths – people without consciences, people whose only joy in life is the hunt. They stalk us. Their greatest joy, maybe their only joy, is fresh kill.

In the business world they are legion. We admire the hell out of them. Donald Trump is an icon who even pitches his cold-bloodedness on a TV show where he delights in firing people. We’re supposed to admire the coldness, the brutality of that world. But we’re not like that, 96% of us. We like to read about Trump (and Ted Bundy), but we don’t want to be them.

With tax outlaws who want to rejoin society, the predators came up with the “pennies on the dollar” radio pitch. They urge people in tax debt to call them. What they really want is $5,000. They promise nothing. Usually, when they are done, the poor schmuck who answered the ad is 1) still in tax debt, and 2) $5,000 deeper in other debt.

Because I knew someone in Montana who knew someone in a small Colorado town who knew someone who had not filed a tax return in four years, I am dealing now with an OIC client. We have filed all his returns, and attempted to isolate all of his tax debt in his corporation to give him the “fold-the-tent” option, leaving his family free and clear. It’s taken many hours, many long phone conversations. But we are nearly there.

Public liens have been filed against his corporation, and predators watch these filings closely, looking for prey. He started getting the phone calls. The sales pitches start, and they seek to undermine me, telling him that I am going about it all wrong and that they have the key to his salvation, the end to his worries and early-morning awakenings.

All they want is $5,000 on the OIC end, and another $10,000 in legal fees. They want it up front. They want him to sell assets or borrow on a credit card or get a loan from a family member – figure out some way to pay them.

I have warned him to stay away from these people, that they only want that one-time cash hit, and will in fact only make his problems worse.

He’s gone into hiding now. I am afraid he is going to swallow the hook and will soon be fresh kill. The only thing that might save him is that he might not be able to get that up-front money. That’s my hope.

I’m not a saint. I do bad things, but unlike sociopaths, I feel bad when I do bad things. I work for money. Like the guy who fixes my car or the one who just fixed our front doorway, I take pride in offering value for pay. We are not geniuses, none of us who do these things, accounting and mechanics and carpentry. We just learned to specialize as a means of paying our way.

But I get frustrated with it all at the same time. It is outrageous that H&R Block charges $160 for a 1040EZ. It is outrageous that people have to pay $20 to “e-file”a return, as IRS ought to make this free and accessible to everyone. It is outrageous that IRS does not offer a means by which ordinary people can approach them have have their tax returns prepared for them … at “taxpayer” expense. The whole notion that professional tax advice and service is roped off and reserved for private sector business models is perverse.

And it is outrageous that IRS does not remove the predators from the OIC process. They ought to draw people in by offering free help to get them caught up, waiving penalties and forgiving tax when it is apparent that, no matter the human failing involved, the tax will simply overwhelm the taxpayer.

Enough. Prey become dinner when they are not cautious, and have no one to blame. But I refuse to buy into the meme that predators are serving some useful purpose in interdependent human society. They only prosper because they pretend to be like regular people – they mimic us. But they are not like regular people, and a society that glorifies them is a sick society.

We are a sick society. We are unique that way. We breed sociopaths with our Atlas Shrugged mentality. I was not surprised to learn that 4% of us are like that. But I was surprised to learn that it is not so in other countries – usually less than 1%.

We are a unique country.