You’ve probably heard the old saying, “if it sounds too good to be true, it probably is.” It turns out that that advice is particularly applicable in the tax debt relief arena. Many taxpayers who are struggling with tax debt often feel that their problems are insurmountable, which can result in feelings of desperation.
Unfortunately, unscrupulous individuals take advantage of these taxpayers’ vulnerability by offering quick-fix solutions that seem irresistible, but often turn out to be scams. Below, we will go over some of the most common red flags of tax debt relief scams.
What is a Tax Resolution Scam?
The IRS offers a number of programs to assist taxpayers struggling with back taxes. Two of the most common of these programs are offers in compromise, which allow the taxpayer to negotiate a settlement with the IRS and pay less than the full amount they owe, and installment agreements, which allow the taxpayer to break down a large tax bill into more manageable monthly payments. While it is not strictly necessary to hire a tax professional to take advantage of these programs, most taxpayers are ill-equipped to deal with the IRS on their own and enlisting the assistance of a tax professional can increase their chances of success.
Scammers posing as legitimate tax professionals exploit the public’s ignorance of the inner workings of the IRS by making outrageous claims, such as guaranteeing that the IRS will accept their client’s offer in compromise or that they can settle their client’s debt for an unrealistically low amount.
The most common tax resolution scams proceed more or less like this: After making a too-good-to-be-true offer, the scammers will then charge their clients a steep up-front, non-refundable fee, string them along for weeks or even months, and then inform them that they no longer qualify for debt relief or that the IRS has rejected their offer.
Tax Resolution Scam Red Flags
It can be difficult to identify a tax resolution scam because scam companies usually offer the same services that legitimate tax resolution companies offer, such as offers in compromise, installment agreements, penalty abatement, and innocent spouse relief. However, tax resolution scam companies typically engage in a variety of practices that indicate that they are not legitimate businesses. Some of the most common red flags that indicate that the company you are dealing with might be operating a scam include:
- Promising that you qualify for a “new IRS program” that is available only for a “limited time”
- Guaranteeing that your debt will be forgiven
- Offering to settle your debt for “pennies on the dollar”
- Charging hefty up-front fees before performing any services
- Utilizing a no-refund policy
- Performing only a cursory investigation into your finances
- Unreasonably delaying your case
- The company does not have a local office in your city
- Using high-pressure sales tactics
If you believe that you have been solicited by a tax resolution scam company, you should report it to the IRS.
Call East Coast Tax Consulting Group for a Boca Raton Tax Help Specialist
One sure way to avoid tax resolution scams is to seek the assistance of a licensed CPA with many years of experience and a proven track record of success in helping his or her clients solve their tax issues. If you have questions or concerns about tax resolution programs, contact a Boca Raton tax debt help specialist at the East Coast Tax Consulting Group by filling out our online form or calling us at 866-550-7655.