Tax Relief Scams!
You’ve heard the commercials and seen the ads: “We solve your tax problems for pennies on the dollar!” “We are the only tax resolution firm with ex-IRS agents!” “No one else knows about this limited IRS program, so call us today!”
As the saying goes, if it sounds too good to be true, it probably is.
As actual former IRS Revenue Officers (the collectors) and former IRS Revenue Agents (the auditors), we’ve included below some of the most common Tax Relief Scams that we’ve seen while inside and outside the IRS. Some of these scams may sound familiar to you and others may come as a big surprise. This page will be updated weekly, so check back regularly for more information and news on additional “tax relief” companies that have finally been caught.
The Truth About “Tax Relief”
When it comes to routine tax relief, any and all relief is granted under two official sources.
1) Title 26 of the United States Code. This is the Internal Revenue Code, aka Tax Code.
2) Internal Revenue Manual. This is the policy and procedure handbook of the IRS.
In general, the IRS looks at only these two sources when determining if tax relief, such as a payment plan or penalty abatement, can be granted. Because these are the only two resources tax relief companies can use to help taxpayers, a particular company cannot have any “secret knowledge” or “special tax solutions” over the other, despite any claim to the contrary.
Top Scams of Tax Resolution Companies
Tax Relief Scam #1 – Misrepresenting Potential Outcomes
This scam typically begins with deceptive advertisements claiming to reduce a taxpayer’s tax liability for pennies-on-the-dollar and by settling with the IRS for a fraction of what a taxpayer owes. These adverts are heavily utilized online and through unsolicited mail usually disguised to look like official IRS notices. If you’ve ever had a tax lien filed against you, you are likely very familiar with the subsequent barrage of solicitations that will follow. One advertising method that has become more prevalent recently is the use of popular radio personalities and other celebrities to endorse these unscrupulous tax relief companies. They often make grandiose claims of settlements and urge listeners to call right away to prevent missing out on a supposed time-sensitive opportunity for tax relief. These false promises continue once a taxpayer visits the company’s website or makes a call to the company. See below.
Tax Relief Scam #2 – Salespeople
Related to the above, most of these unscrupulous tax relief companies have numerous salespeople that handle all incoming calls. They are not licensed tax professionals and their only goals are to determine how much you owe and then convince you that they can substantially reduce your debt, all the while securing a non-refundable deposit via your credit card, bank number or personal check. Once you sign up via a contract, they continue to charge you and take little or no favorable actions on your case. See examples below.
Tax Relief Scam #3 – Shell Websites
Fraudulent tax relief companies, and the aggregators who serve them, love the internet. Many of them have literally 100’s or 1000’s of websites that give the appearance of being an established, reputable, and full-service tax relief company. They usually tout their Better Business Bureau rating and generously use popular tax relief slogans such as the ones mentioned above to capture the taxpayer’s attention and provide them with a false sense of hope. Most of these sites have contact forms on every page (to quickly capture your valuable personal information) and fail to identify any actual licensed tax professionals. When a taxpayer enters his or her name and contact information, the aggregated information is then transferred or sold to unscrupulous companies that will use their salespeople to solicit you by phone, mail, and/or email. Taxpayers who subsequently sign up with these companies often incur reoccurring charges in exchange for empty and exaggerated promises.
Similarly, and almost humorously, many of these same companies own and manage websites that claim to be an independent organization that rates and reviews “tax resolution” companies. When you arrive at these fake review sites, which at first glance appear to be legitimate, the unscrupulous tax relief firm that owns the site is always rated number one. Simply stated, these tax relief companies are rating themselves.
Tax Relief Scam #4 – Scam Taxpayers, Change Your Name, Repeat
What happens when taxpayer-victims and State Attorneys General start to catch on to these companies? The companies simply change their name and set up a new corporate structure. Once the tax relief firm starts to have issues with its deceptive business practices, it forms a new corporation and goes right back to the same unethical and illegal practices. Sooner or later this happens because once the engagement is secured by the salesperson and payment is collected, the company is expected to deliver the impossible outcome promised by the sales teams and advertisements. When the outcome isn’t delivered and complaints start to pile up too high, it’s simply time for a new name and the next round of consumer abuse.
Tax Relief Companies Recently Shutdown for Fraud and Deceptive Practices
Tax Masters – Tax Masters and its founder Patrick Cox CPA were found guilty of defrauding taxpayers nationwide and ordered to pay approximately $200M in restitution. A Texas court determined they misled taxpayers in television ads and sales calls and had over 100,000 fair trade practice violations. Read more about their deceptive practices here.
JK Harris – Attorneys General from 18 states brought forth charges against JK Harris for misleading advertising and business practices. They were one of the largest tax relief firms in the country. Read more here.
Ronni Deutch (aka The Tax Lady) – Prior to being disbarred by the California State Bar, Roni Deutch was a tax attorney who operated another tax relief scam in California. Read how she and her company violated court orders and scammed thousands of taxpayers out of millions of dollars.
American Tax Relief – A suit by the Federal Trade Commission found American Tax Relief swindled taxpayers out of approximately $100M via false promises and deceptive practices. Read more here.
Unfortunately, the above examples are just the tip of the iceberg. There are many other bad apples in the tax resolution industry that have yet to be prosecuted by the authorities. To help protect you from being the next unwitting victim, we’ve included a few tips below.
How to Protect Yourself
These resources may help reduce your chance of retaining an unscrupulous tax relief firm and tax professional.
1) ComplaintsBoard.com – This website and the one below provides invaluable feedback to taxpayers and helps to expose those organizations that don’t have their client’s best interest in mind.
2) RipoffReport.com – While this website and the one above contain valid concerns from legitimate taxpayers, it should also be noted that many unscrupulous tax firms have begun using the sites to post fraudulent reviews as a means of discrediting their competitors. As a result, not all of the reviews are genuine.
3) Google Search – At minimum, taxpayers should always search the Web in the name of the person AND company they’re thinking about hiring. Unfortunately, some “customer reviews” on Google, Yelp, and other popular sites also contain reviews from paid third parties, employees of the company being reviewed, and other non-existing customers. In one recent case, Yelp has sued a law firm that was using its employees to post fraudulent glowing reviews.
4) Ask Questions – Perhaps the most important thing a taxpayer can do when seeking professional tax relief help is to “interview” the tax firm by asking valid questions about their credentials, experience, and case resolution procedures. A reputable tax relief firm will be able to tell you exactly who will be working on your specific case and how to contact that person directly. Remember, only Enrolled Agents, CPAs, and Tax Attorneys are permitted to represent taxpayers in front of the IRS.
* Warning *- Better Business Bureau (BBB) – At this time, Landmark Tax Group is unable to recommend the BBB as a reliable resource for taxpayers. To learn about the BBB’s apparent deceptive practices, please refer to the following articles:
– Terror Group Gets ‘A’ Rating From Better Business Bureau
– Los Angeles BBB Office, the Largest in the U.S., Shut Down for Apparent Fraud
– Florida Congresswoman Corrine Brown Alerts Congress and the General Public About the BBB’s Wrongdoing
How Landmark Tax Group Can Help You – Our Values and Commitment to Clients
At Landmark Tax Group, the very fabric of our Firm revolves around our clients. We are committed to serving the interests and needs of our clients, and to carrying out that commitment with integrity and professionalism.
Your IRS or State tax matter will be expertly handled by our team of CPAs and former IRS Agents with years of experience dealing with back taxes, audits, liens, levies and other tax issues both within the IRS and in private practice. Every taxpayer receives personal attention and ongoing updates as their tax relief case is being resolved.
We promise to:
- Adhere to the highest standards of ethics and professionalism.
- Be responsive to the needs of taxpayers and other stakeholders.
- Operate with integrity and fairness.
- Exercise due diligence at all times.
- Protect your taxpayer’s rights and advocate zealously on your behalf.
See: Our Results
If you have a tax issue with the IRS, contact us today to speak with a professional tax relief expert you can trust.
“You appear to have moved mountains. I could not have done any of this without you. My sincere thanks.” – Patricia C.
(More Client Testimonials)
For immediate tax help from ethical, experienced and professional tax relief experts, contact us today at 1 (714) 382-6780 for a FREE and CONFIDENTIAL consultation.
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