Landmark Tax Group

Tax Tips

How to Find a Legitimate Tax Relief Company

It can be a daunting task when you’re searching for a legitimate tax relief company. No one wants to be a victim of the millions of dollars being extorted from consumers. It seems like all you hear or read about are the hundreds of scams being played on countless people every day.

You’ve scoured the internet searching for a sign that maybe this could be the one, but how do you really know? Here are some ways to help you navigate through the never ending cons of tax relief companies.

The most common scam is through television and radio. People want to believe what they see on TV must be true. “Tax Lady” Roni Deutch was a well-known advertisement staple. According to the State of California Department of Justice, Deutch collected large fees upfront and made promises she did not keep. A $34 million lawsuit was filed against her by the California Attorney General and $435,000 was ordered to be refunded to customers. The irony is that television is for entertainment, so when it comes to owing money to the government, why would you trust a commercial without doing your homework?

Most bogus companies make misleading promises that you qualify for an IRS program to reduce your tax debts. Scam artists find their prey by searching through tax liens and offer them false tax resolutions or special limited time offers only they can give. JK Harris & Co. was another nationwide firm offering to reduce your tax debts for pennies on the dollar. They filed bankruptcy while still owing $20 million in unsecured claims. Employees were still waiting to be paid their last paychecks as reported by The Post and Courier. Your best bet is someone that has extensive knowledge of the tax code and the policy and procedure handbook of the IRS, usually a CPA, Enrolled Agent, or former IRS Agent. These professionals are up to date on the changing laws and can better assist you in determining what your next step is.

Scammers will call or send unsolicited mail claiming that you qualify for a special settlement of your tax debt. Their goal is to get you on the phone, verify how much you owe, and sell you on their qualifications that they can reduce your tax debt. They will persuade you into signing up with them, but for a nominal fee. Once they bait you fees can get excessively high. CNBC reports that American Tax Relief of Beverly Hills was charged by the Federal Trade Commission with falsifying their abilities to reduce tax debts for thousands of customers. They collected over $60 million dollars in fees from their customers.

They will request the same documents over and over and then will tell you, you no longer qualify or the IRS has rejected their proposal. This tactic is a way for scammers to continue to deplete your life savings and leave you further in debt. While you try to get more information on your case, these guys have already closed the company and set up shop somewhere else, but with a different company name.

The Federal Trade Commission reports that taxpayers who filed complaints against sham tax relief companies paid thousands of dollars up front ranging from $1,500 to $9,000 and unauthorized payments were taken from their bank accounts and credit cards. These companies pretend to file the necessary paperwork for the IRS programs, but in most cases the taxpayer is not qualified and is falsely lead to believe their case is being taken care of.

Taxpayers may be well-served by staying away from companies with high pressured sales tactics and those that charge exorbitant fees. ABC News stated former Houston-based firm, Tax Masters used deceptive business practices telling customers they could get their payments down to “next to nothing” with a 97 percent success rate. They filed for bankruptcy a day before the case against them began. You can always call the IRS yourself and see what options they give you. Finding a CPA or Enrolled Agent who also has experience as an IRS agent is one of the best ways to ensure you are working with a reputable tax relief company.

Only the IRS can determine whether or not you qualify for their programs, so beware of any company that guarantees results. Avoid companies that claim they can stop IRS collection efforts because consequently you can be hit with wage garnishments, bank levies, and tax liens.

Tax relief programs are not easy to qualify for and a legitimate tax settlement company will have qualified personnel to guide you through the process. Some of the most common tax relief programs are Offer in Compromise, penalty abatement, and installment agreements.

An Offer in Compromise is where the IRS will accept less than you owe, but you must show proof that all your financial resources have been exhausted and that there is no future money to be made.

A penalty abatement is where the IRS will eliminate or reduce the penalties, late fees and possible interest you incurred from being behind on your taxes. If you can prove extenuating circumstances, then you can apply for this relief. Installment plan fees range from $105 or $52 and monthly payments are debited from your bank account for up to six years or longer.

If you feel you have been a victim of tax fraud or suspect the company of abuse, then you can report them to the IRS. There are many sites that post reviews of fraudulent companies and that alone could stop you from doing business with them. Research a company thoroughly before engaging them to help you settle your tax debt.

The economic downturn has made it hard for distressed people to pay their tax bills. Make sure you do your research before you do business with a tax settlement company. Look for all the red flags and follow the adage “If it sounds too good to be true, then it probably is.” Falling for a tax scam can cause you deeper despair and put you further into debt. It might be hard to sift through all the false promises and sleazy scams, but if you look hard enough you will find a legitimate tax relief company such as Landmark Tax Group.

“You appear to have moved mountains.  I could not have done any of this without you.  My sincere thanks.” – Patricia C.
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