Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, November 22, 1993 TAG: 9311190388
SECTION: BUSINESS PAGE: A-8 EDITION: METRO
SOURCE: GLENN BURKINS KNIGHT-RIDDER/TRIBUNE
DATELINE: LENGTH: Medium
If you have an unpaid tax debt, no reasonable offer to settle it will be refused, the agency says.
Try telling that to taxpayers in Laguna Niguel, Calif., where only 15 percent of such offers were accepted in the nine months that ended June 30.
Residents of Newark, N.J., might be skeptical, too. The IRS accepted their settlement offers 28 percent of the time.
But in Fargo, N.D., IRS agents apparently were more agreeable, accepting 80 percent of the deals proposed. In Albany, N.Y., the acceptance rate was 77 percent.
Why did the IRS reject taxpayers in some towns more frequently than people in other towns?
It depends on who you ask.
According to the IRS, people in some parts of the country simply propose better deals.
"It has to do with the individual offer," said Joan Schafer, an IRS spokeswoman in Philadelphia. "The rules are consistent throughout the country. They don't vary by region or city."
If the rules don't vary, other factors might, says the National Taxpayers Union, a consumer group in Washington.
For example, IRS agents in some regions may be more lenient, says Jack Warren Wade Jr., a former agent who recently wrote an article for the NTU newsletter.
Agents in regions where acceptance rates were low tended to have more IRS experience, and that might have made them more reluctant to accept a marginal offer, Wade said.
"It's a difference in attitude," he said. "When something has been done a certain way for so long, it's hard to get them to change."
Wade concedes his conclusions may be faulty; neither he nor the IRS has studied the figures extensively.
Schafer said the IRS is sure of one thing: When a reasonable offer is proposed, it generally is accepted.
In 1991, for example, taxpayers paid an average of 26.5 cents on the dollar to settle delinquent tax debts, according to IRS figures collected by the NTU. By 1993, that number had dropped to 14.8 cents on the dollar.
"We want to collect as much money as we can, and we want as much of it as possible when an offer is made," Schafer said. "But we'd rather get some of it than none at all."
Nearly everyone agrees the IRS generally has become more cooperative. About a year ago, the settlement program for delinquents became even more lenient when the agency began allowing taxpayers to write their own payment schedules.
The goal was to encourage delinquents to step forward and pay up. According to federal estimates, the nation loses about $10 billion a year in uncollected taxes.
"I think the IRS has made tremendous strides in creating a favorable environment for people who owe money," Wade said. "In the past, they were treated like crooks. Now they are treating them like human beings."
For people looking to negotiate a tax settlement, Wade offers some advice: Don't make frivolous offers. If you can scrape together enough money to pay the back taxes and hire a professional who is used to dealing with the IRS, do it.
by CNB