Taxpayers Fear the IRS–Nina Olson Interview on ABC News

As usual, ABC News missed the mark in their interview of Nina Olson, the National Taxpayer Advocate with the IRS. ABC had the opportunity to speak to the National Taxpayer Advocate about tax problems and chose to air more information about the symptom of tax disease (tax debt) than about the problem itself (IRS compliance). The simple fact remains that most tax problems begin and end with tax compliance issues, like failing to file tax returns, failing to make quarterly estimated tax payments on time, or failing to make payroll tax payments when they are due. The vast majority of people who come to Tax Masters with tax problems have tax compliance issues. They may want to settle their tax debt, and invariably everyone with a tax debt wants to find some way out of their situation, but that settlement is not possible until the taxpayer files all their delinquent tax returns and makes any currently due quarterly or payroll tax payments.

While ABC News focused on the debt issue, they did not include any content from the Nina Olson interview addressing how to regain compliance and the importance of doing so.

At Tax Masters, we have been asking for years, the right questions. This is direct content from Patrick Cox, Tax Masters’ CEO and founder. ”Are you being audited? Have you not filed tax returns for years? Has the IRS come to your home or place of business? The IRS will relentlessly pursue you for unpaid taxes. TaxMasters can get between you and the IRS. We’ll make sure they treat you fairly and treat you with respect.”

ABC News chose to focus on “pennies on the dollar” tax settlements and, in doing so, failed the American taxpayer dramatically. The focus needs to be on compliance. If, after a taxpayer is back in compliance with the IRS and still owes a tax debt, he or she can often afford an IRS payment plan. If the taxpayer cannot afford to pay the IRS, cannot afford a payment plan, and has no assets, there are other collections alternatives like partial payment installment agreements, currently uncollectible status, and the holy grail of tax relief, the offer in compromise.

ABC News failed to focus on the core issue of tax woes. Instead of discussing the issue, tax compiance, they chose to concentrate on the symptom, which is tax debt. Shame on you, ABC. You should have listened.

Transcript of ABC News Interview of Nina Olson

ABC News: Can I trust the IRS to work with me on my tax problem?

Nina Olson, National Taxpayer Advocate: Taxpayers fear the IRS and there’s a reason for that. The IRS is the most powerful creditor in the United States. We have awesome collection powers. And so there’s a basis for that fear. But that fear can be exploited so that taxpayers aren’t even willing or aren’t comfortable doing something that could protect themselves; just picking up the phone and talking to the IRS and walking through the problem, or even reaching out to my organization, the Taxpayer Advocate Service if they’re really having an economic hardship. We can help you and we can get collection activity stopped while we try to solve the problem.

ABC News: Is it possible to settle my IRS debt “pennies on the dollar?”

Nina Olson, National Taxpayer Advocate: Actually it can happen that because of your ability to pay. You know, if you have such reduced ability to pay, you may end up paying what could be pennies on the dollar of what you owe to the IRS. But it’s not an easy thing and you have to show the government, you have to show the IRS, that they are not going to be able to get any more money out of you than pennies on the dollar. And if that’s the truth, then you can settle with the IRS for that amount. But to say that you’d be able to do that routinely is just not true.

ABC News: How does the IRS determine whether I qualify to settle my debt for less than I owe?

Nina Olson, National Taxpayer Advocate: What the IRS does is it looks not only at your income and your expenses, but it looks at all your assets. You know, what is your net equity in assets? And so we’re getting a whole complete financial picture as well as mitigating circumstances like illnesses or job loss. But, you’re really looking at the financial picture and then deciding what is that person’s ability to pay?

ABC News: If I want to hire someone to help me with getting a collection hold, who should it be?

Nina Olson, National Taxpayer Advocate: Someone at the company who is qualified to practice before the IRS. It has to be an attorney, a CPA, or what’s called an Enrolled Agent, someone who’s taken a test to practice before the IRS. That person has to call on your behalf and they have to let the IRS know that they are there, that they have been hired to represent you. And then they can talk to the IRS about getting a collection hold. Now you too, a taxpayer, can call the IRS and ask for a collection hold and, you know until they can work out some collection alternatives like an installment agreement or an offer in compromise. A lot of this the taxpayer can do him or herself. But a lot of taxpayers are frightened of doing that themselves.

ABC News Interview of Nina Olson, National Taxpayer Advocate

ABC News Tax Masters – Taxpayers Fear the IRS – Nina Olson, National Taxpayer Advocate

Patrick Cox Appears on Varney & Company on the Fox News Network

Stuart Varney invited Patrick Cox, Founder and CEO of TaxMasters (stock trading symbol TAXS), on “Varney & Company” this morning to discuss a recent report from the Treasury Inspector General for Tax Administration (TIGTA) which stated that nearly 50,000 prisoners claimed tax refunds totaling over $130 million even though they reported on tax returns that they received no wages.

“Anytime you have the government giving out what we call refundable credits, you’re really not getting a refund. You’re getting a distribution of government assets by filing a return claiming that you have a limited amount of income and a couple dependents,” said Patrick Cox. “The IRS has been chasing the fraud in this program for a long time.”

According to the IRS Management Challenges Memorandum from TIGTA to Secretary Geithner on October 15, 2009, the IRS admits erroneously paying $10 billion to $12 billion every year to people inaccurately claiming refunds based on the Earned Income Tax Credit (EITC). It may be easy to get bent out of shape by 50,000 prisoners costing the US Treasury $130 million in a year. The fact is that  this is a small drop in the bucket compared to the billions issued annually by the IRS to people who are defrauding the system through the EITC program. The EITC, in its current form, encourages very low income filers to make sure they qualify. If they make a few dollars too much in a year, they miss out on thousands of refund dollars.

Concerning prisoners in particular, “The form you use to file [to claim the EITC] doesn’t ask you if you’re a prisoner,” said Cox. “Maybe that should be one of the questions.”

The conversation quickly turned to the possibility of the Bush tax cuts being extended before year’s end. Cox stated that keeping taxes low will help businesses and the economy, but expressed that people will still have tax problems because there are always taxpayers who fail to file, cannot pay, or who hope to pay less than they owe.

The final question was very direct. Do we need to simplify the tax code?

Cox’s response? “Simplification doesn’t hurt anybody… Ultimately, our business and economy are complicated. Simplifying [the tax code] completely is probably not very realistic.”

About Tax Masters

Houston based Tax Masters has served tens of thousands of clients and had incredible success with settling federal tax debt, defending clients in audit, setting up monthly IRS payment plans, and filing past-due tax returns. The company is publicly traded under the stock symbol TAXS.

As Chairman of the largest publicly-traded tax resolution company, lately I’ve been thinking a lot about how to balance the market’s desire for current results with our need to invest to achieve our longer term vision. The constant scroll of stock quotes across our screens too often trumps the truly important accomplishments of companies that are overlooked because they can’t be measured in those tiny increments. A lot of CEOs are pushing back against this short term obsession. Instead, they are focused on creating long term value by implementing strategies and actions that will enable them to achieve their overarching vision.After giving this some thought, I believe it is appropriate to take this opportunity to reiterate TaxMasters’ mission, and to express how seriously we take the work we do on behalf of taxpayers.

Tax Masters is dedicated to helping taxpayers who want to favorably resolve their federal tax debt. We will employ and use the expertise of ex-IRS agents, enrolled agents, attorneys, CPAs, and seasoned tax consultants who are ready to help you understand specific tax issues. We can help you fulfill your obligation to pay your back taxes without it costing you your life. Tax Masters offers services customized to bring the most benefit to each of our clients. We shield you from IRS harassment and lead you to solid ground using proven and effective tax relief services customized to solve your specific tax issues.

With a challenging economy and increasingly complex tax laws, I feel TaxMasters’ mission is becoming more relevant, and more valuable, every day. I want to thank our many dedicated employees for their hard work in helping make this mission a reality, both today as well as long into the future.

Patrick Cox Tax Masters

Patrick Cox is President, CEO, and Board Director of Tax Masters, Inc. (TAXS), a company dedicated to helping consumers solve their tax problems. Patrick Cox is a tax expert who founded Tax Masters in 2001, which has become one of the most effective IRS tax relief teams in the tax representation business. Patrick Cox and Tax Masters are located in Houston, Texas.

Glenn Beck Controversy Comes to Tax Masters

Whether you are a current, prospective or past customer of ours at TaxMasters, or simply pay attention to the commercials that run throughout the day on cable and network TV, it’s likely you have seen a TaxMasters commercial.

There has been a recent wrinkle to these advertisements though and it’s not without controversy. It relates to FOX News and Mr. Glenn Beck – but I’ll get to that in a moment.

Our reasons for advertising via television are fairly straightforward. Tax payers across the United States are dealing with tax problems like large debts owed to the IRS and past due returns that are still un-filed. Our growth over the past two years illustrates just how large the demand is for help with tax problems and dealing with the IRS.

Not surprisingly, the best way to reach – and help – these taxpayers, is television. CNN, MSNBC and FOX News and others are among the outlets where you’ll see commercials (with my smiling face) talking about how TaxMasters can help those with tax problems. 

Back to the controversy.

FOX News host Glenn Beck has been the focus of passionate debate and discussion – for and against him – for most of his career. That has only intensified in recent years as Mr. Beck has chosen positions on issues that have offended and angered some, while finding support among others.

So what does this have to do with TaxMasters? We recently have been hearing from individuals that are opposed to our advertisements running during Mr. Beck’s program.

The Service Employees International Union (SEIU) is among the organizations that are encouraging people to contact us and share their opinions on Glenn Beck and why we should not advertise during his show. In fact the SEIU has a dedicated site that encourages folks to contact us (you can view it here).

On the flip side, we’ve received the same passionate outreach from supporters of Mr., Beck’s show. It’s no exaggeration to say that emotions run high on both sides.

It’s important we do hear these concerns and we want the feedback! I am inviting people from both sides of the debate to contact us and share their position on this topic. We have set up a dedicated phone line at 281-497-4226, ext. 7000 to give everyone the proper forum and help us understand both sides of this debate.

You can also share your feedback via the comments here on the blog. Please remember, be constructive and respectful and comments will be moderated.

Patrick Cox Tax Masters

Patrick Cox is President, CEO, and Board Director of Tax Masters, Inc. (TAXS), a company dedicated to helping consumers solve their tax problems. Patrick Cox is a tax expert who founded Tax Masters in 2001, which has become one of the most effective IRS tax relief teams in the tax representation business. Patrick Cox and Tax Masters are located in Houston, Texas.