Q: Why is it a good thing that someone can settle an IRS tax debt for much less than what is owed? Don't we all pay for this?

A: It is a good, logical question, and one that many scrupulous taxpayers understandably raise. The IRS has had a considerable boost in its enforcement budget to pursue all tax delinquencies, both related to personal and business finances. In many circumstances, usually with the help of tax relief firms, Certified Tax Resolution Specialists, tax attorneys, the IRS is often willing to accept less than the total amount owed to bring a taxpayer back into compliance.

Do compliant taxpayers end up paying for these settlements? According to Michael Rozbruch, founder and CEO of Tax Resolution Services, Co. (TRS), a national leader in tax mediation and negotiation services, the answer is a definitive "no."

"Most people with tax problems start off by failing to file income tax returns for a myriad of reasons: divorce, serious mental or physical illness, death of a spouse or family member," he explains. "The majority are good people for whom life-altering events took precedence over filing income taxes."

Rozbruch adds that before the IRS will enter into any type of tax settlement agreement with the taxpayer, all legally required income tax returns must be filed first. In addition, as an integral part of any agreement, the taxpayer must stay current on all future filings and tax payments; otherwise he or she risks default of this agreement.

"It has been our experience that most people follow through on this, and, as such, become once again part of the taxpaying public," said Rozbruch. "By bringing this taxpayer into compliance, the IRS has added another taxpayer to its rolls, thereby increasing tax revenues."

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