Tax Relief Companies – Are They Legitimate or a Scam?
Beware of any tax relief company that promise they can easily lower or completely eliminate your tax debt. It is usually a scam, especially when they demand the entire payment up-front. These types of companies have no legal or professional background or knowledge about the complex tax laws that are so essential in aiding a taxpayer with IRS tax debt or tax problems. Tax relief companies essentially prey on the down-and-out taxpayer who feels he or she has nowhere to turn.
The reason for the increasing incidence in tax relief scams is due to the IRS stepping up its much heavier pursuit of back taxes owed by taxpayers due to the U.S. financial crisis. Look out for the most common tax scams by tax relief companies (heavily advertised on t.v., radio programs and the internet) promising to settle your tax debt for “pennies on the dollar.”
So, how do they find you?
Looking to prey on the desperate, these scammers find out which taxpayers have been issued IRS tax lien notices, then call them up and offer fraudulent tax resolution services to reduce or eliminate their tax debt. Here’s the sad truth: they take your money, usually up-front with no accountability and no tax resolution services and leave you owing more taxes, penalties and interest than you did before. And according to IRS reports, these tax scams often deplete a taxpayer’s life savings.
These types of companies often charge high fees in the thousands without any significant or professional service. Their ploy is to request the same types of documents again and again from the client and then come to the conclusion that they no longer qualify for their services or that the IRS rejected their negotiations. Even worse, the tax relief company may just disappear…with your money.
The Tactics They Use
These companies employ sophisticated marketing strategies designed to exploit taxpayers’ fears. They often use official-looking correspondence and urgent language to create panic and push for quick decisions. Some common tactics include:
- Promising acceptance into IRS programs without reviewing your specific situation
- Using terms like “special program” or “limited time offer” to pressure immediate action
- Claiming to have special relationships with the IRS
- Making unrealistic promises about reducing tax debt by specific percentages
Another type of tax-relief scam is the case where a taxpayer receives a letter from what looks like a government entity, claiming you qualify for tax relief. Do not be fooled…this is not legitimate. It is from a scammer hoping to get you to fork up money with the fraudulent intent of trying to help you settle your tax debt. Watch out for these types of tax relief companies.
What These Scams Really Cost
Beyond the immediate financial loss from upfront fees, these scams can cause:
- Increased tax debt due to continued penalties and interest while nothing is being done
- Missed deadlines for legitimate IRS programs and appeals
- Lost documentation and financial records
- Compromised personal and financial information
- Additional fees and charges hidden in fine print
Don’t become a victim. If you owe the IRS significant amounts of money and feel you cannot handle the situation on your own, work directly with an experienced and reliable tax attorney. If negotiated and handled properly, you could be eligible for a monthly payment plan or an offer in compromise allowing you to settle your tax debt for less than you owe.
Taking Action with the IRS
It is very important to remember also…the last thing you want to do is hide from the IRS and ignore notices from the IRS. Always respond to every notice. If ignored, the IRS will only pursue you more aggressively by quickly attaching tax liens on your assets and garnishing your income. The best way to avoid the fraud by a tax relief company is hiring a tax attorney well-versed in negotiating with the IRS to aid you in whatever IRS tax problem you may be experiencing.
Working with a Licensed Tax Attorney
A legitimate tax attorney offers several advantages:
- Deep understanding of tax law and IRS procedures
- Ability to evaluate your specific situation and identify real solutions
- Professional representation before the IRS
- Clear explanation of your rights and obligations
- Ethical obligations to act in your best interest
Find a tax attorney experienced with IRS tax settlement who can negotiate before the IRS on your behalf. The sooner you deal with the IRS, the easier it will be to resolve your case. The Tax Attorneys at Delia Law have many years of IRS experience and will aggressively represent you before the IRS. Please call for a no-cost tax attorney consultation at (619) 639-3336. We look forward to helping you.
This blog post is not intended as legal advice and should be considered general information only
