Originally Posted by
Dirtdiver
Those settlements probably aren't what they appear to be for someone who hasn't dealt with the IRS.
A couple years ago my tax preparer didn't include one of my 1099s when he filed. I didn't notice it was missing either, since it was in the pile, just not on the form. IRS noticed it six months later, and the notice said I owed about $20,000.
They put every deduction/expense in dispute. I really owed about $100, plus a little penalty.
Moral of the story, they send you a HUGE bill to get your attention. So when I settled for pennies on the dollar, I didn't get out of $19,850 in taxes, just fixed a small error. I suspect most of those "pennies on the dollar" stories are similar.
I agree. I moved a few years ago. I had opened a bank account that paid 6 percent on a savings account for the first 6 months. I then closed the savings account and forgot about it (never paid taxes on the interest I made). I received a bill from the IRS a few years later for about $23,000. I ended up only owing about $150 in taxes for the interest on that bank account. The bill I received ****ed me off because it didn't give me any credit for the taxes I did pay that year. It assumed I evaded everything. I have an accountant that keeps good records so he took care of it for me. It still ****ed me off.