06:42 PM PDT on Thursday, April 7, 2005

By ALLEN SCHAUFFLER / KING 5 News

There are eight more days until the tax deadline rolls around and many of us are looking for ways to save money and satisfy the government at the same time.

But don't forget to cross the T’s and dot the I's. Allen Schauffler reports on a scam involving an IRS program designed to help people in debt.

One man says he is embarrassed that he was taken by a tax scam. He doesn’t want to show his face but he does want to tell his story.

It started with a six-figure debt to the IRS and a company that promised to help.

"They basically told me that, for a fee, that they would be able to settle my debt that I owed the IRS for 10, 15, 20 cents on the dollar max," said the man.

The company claimed they could use a relatively new IRS program called the "offer in compromise" option. They didn’t ask for any of his financial information, but they did ask for $1,500.

"Not knowing any different, I just, you know, gave them the money and they put together these forms," he said.

But the program, started in 2003, has strict requirements. Not every indebted taxpayer is eligible and other payment options must have been exhausted, with the taxpayer and the agency considering an installment plan.

Also, the offer for less that is owed still has to add up for the IRS. Our victim's offer was rejected, dismissed as unrealistically low, and he was forced to file for bankruptcy.

"It's the old caveat: buyer beware," said Valerie Thornton, IRS.

Thornton warns that while there are some legitimate tax promoters, too many take your money knowing you do not meet the requirements of the program.

"They promise, very often, very unrealistic results," said Thornton.

And our embarassed victim? He finally hired a legitimate tax consultant, paid some more money, and finally managed to work something out with the IRS through the "offer in compromise" program.