We’d all like to settle our taxes for pennies on the dollar. Sadly, two of the biggest providers of pennies-on-the-dollar tax settlements -- JK Harris and Roni Deutch -- have left their clients with, well, pennies on the dollar in liquidation. Only the best neck-beard in the late-night TV tax settlement business carries on. Being able to settle tax debts that cheap would seem to be quite valuable, which makes the demise of these outfits puzzling. But you don’t need TaxMasters if you can walk away with the sweet deal Ford T. Johnson Jr. got.
A US District Court held Mr. Johnson liable for $887,726.78 in unpaid employee withholding for his business, Koba Associates, Inc. (Koba? Really?), "a small company engaged in, among other things, community planning and economic development in the District of Columbia." With penalties and interest the bill swelled to over $2,474,000 by the end of 2010.
That put Mr. Johnson in a bind. His wife earned a measly $130,000 from Koba Associates, and the company paid another $63,787 -- over $5,000 a month -- to rent his family home.