Buyer Beware: Avoiding Tax Relief Scams

Whether it’s been on the radio, TV, internet, or even in your mail, you’ve seen or heard the ads promising to settle your tax debt “for pennies on the dollar.” How do you know if this is true? How do you know if you can trust a tax relief firm with your money and personal financial information to get done what you hired them to do? This blog will help you know what to watch out for to avoid tax relief scams.

Avoiding Tax Relief Scams

No Explanation of Fees

We’ve seen fee agreements from companies claiming to offer tax relief services. Many of these are long, confusing, and full of legal jargon. Some are way too simple or even non-existent. As for the fees, these scammy companies may require you to make a large up-front payment with monthly payments after that until your tax issue is resolved. Then, you’re left with an unknown time frame for resolution, all along making payments for something you are unsure about. Other companies charge you a very large amount right away then fall off the map and you never hear from them again.  In all these events, you’re left with a requirement to pay and the company has made no promise to deliver the service you expect. And of course, you still have the tax problem. If you see any of these fee structures (or lack of a fee structure all together), beware that the company might be a scam.

Here’s a resource for selecting a respectable tax professional. Make sure the company you’re about to work with checks all the boxes.

Promises That Sound Too Good to Be True

If it sounds too good to be true, it probably isn’t true. Sadly, that old adage rings true for tax relief scammers. If a company is guaranteeing that it can get you out of your tax situation without seeing any documentation and without knowing your exact tax problem, you’re being set up for sure disappointment. Without seeing notices and diving into your personal financial situation, it’s impossible for a good tax professional to know how to help you. Working with the IRS can be complex and each case is unique. A good tax professional can give you definite steps to take, but an actual conversation and deeper dive into your particular situation is a must to get you the help you need.

Don't Fall for Tax Relief Scams

Saying You Can’t Do it On Your Own

The IRS has taken steps to improve its communications and to streamline its process for requesting tax relief. It’s still not easy to decipher everything by any means. But, you can do it yourself. If a company is telling you that you cannot do it yourself, this is false, and it’s likely a tax relief scam

Avoiding Tax Relief Scams

The IRS does not require you to have a representative and often times you can be your best advocate. Having a good and reliable tax relief agency is best when you don’t have the time to deal with the IRS on your own and/or you are unsure or overwhelmed with the process and feel better having someone in your corner working on your behalf.

Being Left Out of the Process

Your tax issue deserves to be given attention, and you deserve to be communicated with. Too often, we hear that companies collect their fee, have you sign authorizations to talk with the IRS, and then you hear nothing back. Well, you hear nothing from them, but then you get a notice from the IRS still asking for money without any explanation from the company you’ve hired to represent you.  It’s true that dealing with the IRS does often take a long time and that it can be complicated. A good tax professional will keep you in the loop as to what is going on in your case.

Misleading Mailings

When a tax lien is filed, that information becomes public. This means that companies can get your name and address and send you mailings offering their services to help fix your tax problem. The problem is that some of these mailings look like they are coming directly from the IRS. [Here are some insights on legitimate IRS letters.] They even include the Department of Treasury logo at the top so they look very official. These mailings have messages intended to scare you into calling the number listed, and when you call, you are strong-armed into hiring that company to avoid IRS collection action. These mailings are incredibly misleading and can lead you down a path you never intended.

Tax Relief Scammers

When you owe tax debt, it’s unfortunate that you need be highly aware of being scammed. As you reach out for help, we urge you to watch out for these typical unethical tactics. Choosing someone you trust to be a strong advocate for you with the IRS can make a big difference in resolving your tax debt. This checklist can help you select a professional tax relief company and avoid those who would scam you out of time and money.

 Select a Tax Professional Using this Checklist