When a taxpayer finds out they owe the IRS back taxes, they often experience a range of emotions, from shame and stress to anger and fear. These mixed emotions can lead some to make abrupt decisions in order to quickly resolve their tax problem. While being proactive with your tax issue is certainly recommended, quickly hiring the first company to promise you an IRS settlement is not.
Know the Warning Signs: Defining Ripoff Tactics
Like all industries, there are companies that are not looking out for your best interest, so it is imperative you recognize the warning signs of ripoff tax debt firms including:
- High-Pressure Sales Pitches
- “Guaranteed” Results
- Advertising “Pennies on the Dollar” Settlements
- Immediate Payment Demands
Each of these tactics is used to gain your trust, but more importantly, your money. Learn how to spot these scam practices so you do not fall victim to one of the many ripoff tax resolution firms.
High-Pressure Sales Pitches
Hiring a tax debt firm to help settle your tax debt is a confusing process that takes a lot of research. When you call a company, they can sense the distress in your voice, and will try to take advantage of the vulnerable situation you are in at the moment by pressuring you to make an immediate decision. Scam firms like these are more interested in their bottom line than helping their clients achieve a tax debt resolution.
It is irresponsible and unethical to guarantee a specific tax debt resolution to clients because the end result is ultimately up to the IRS. While clients feel more at ease with guarantees, every tax situation is different, and there are no one-size-fits-all solutions.
Real tax debt professionals do not promise clients any outcome. If they do, the company they work for is a ripoff. If a company assures you they can get a certain resolution for your tax issue, beware, they are only “baiting” you with unrealistic results so they can “switch” the resolution later, and still charge you money.
“Pennies on the Dollar” Settlements
This scam practice is as old as the tax debt relief industry itself. When you find yourself speaking to a tax debt professional, listen for these three magic words: Offer in Compromise. This IRS program is the Holy Grail of settlements and is restricted to only certain situations. Keep in mind, the IRS receives thousands of applications every year, yet the average acceptance rate for the Offer in Compromise program in 2011 was only 14 percent.
By researching this program extensively and knowing the qualifications for acceptance, you will know if your circumstances qualify for an Offer in Compromise. If a tax professional states you are a candidate for the program without first taking a look at you entire financial situation they are nothing more than a tax debt ripoff, and even if they do examine your financials, always get a second opinion.
Immediate Payment Demands
Just because a company discusses their service fees during the initial consultation does not make them a ripoff. However, be wary if a company stresses that all charges are to be paid before they can start your case. More often than not, firms like this are more interested in turning a profit than helping their clients get out of tax debt.
It is already difficult to handle tax debt, but it doesn’t need to be equally hard to find good tax debt representation if you follow the guidelines discussed on this page. Take these warning signs into consideration before you hire anyone, and always make sure you research the company in question thoroughly.
Contact IRS Tax Attorney Network today and find a tax professional you can trust. www.irstaxattorneynetwork.com