Beware of Tax Scams
I saw a TV commercial last night and this guy claims he can help with my tax dilemma. What kind of person will I be talking to when I call them?
As you have probably discovered, there are a multitude of companies that offer tax debt resolution services. When you call many of these companies, you will be connected to a so-called “consultant” with some fancy, made-up title. Many times this “consultant” is a salesperson, a minimum-wage clerical worker, or a low-level assistant. This person is usually somebody other than an Enrolled Agent and generally doesn’t possess any tax law knowledge at all. They will go through a list of questions for you to answer and give you a so-called free “consultation”. Most of the time, these are salespeople with one goal in mind: to collect money from you. They aren’t there to help you. They will lie to you and manipulate you. They will usually offer some limited service and will invariably come up with some dollar amount for you to pay them so they can work their magic. You may never be offered an opportunity to talk with the person that will be the Power of Attorney responsible to resolve your case until after you hire them. You’ll just love what the so-called “consultant” is telling you about how you won’t have to pay much at all. You’ll be riding off into the sunset with a smile on your face. Then, only after signing the contract and submitting payment, you may hear from the actual person handling your case. Surprise! He immediately begins peddling backwards on everything that you were previously told by the sales person or “consultant”. The common line is, “throw out what the sales person told you earlier, this is really how it is…”. This is common practice in the tax resolution industry.
When you contact MIS Tax Pros, you can rest assured that you will be speaking only with a knowledgeable Enrolled Agent about the details of your situation. A licensed tax professional who has decades of experience representing individuals and businesses before the IRS and State taxing authorities. AND, we won’t ask for a bunch of money up front, only a small retainer is required in most cases to get started.
What about those people I see on TV all the time saying, “We can settle your tax debt for ‘pennies on the dollar'”?
The IRS really frowns upon the phrase ‘pennies on the dollar’ in ads by resolution companies because it is very misleading. They are referring to the Offer in Compromise program which is an option that is used as part of a relief strategy in some instances. However, most taxpayers don’t qualify for this program. Statistics show that about 24%-32% of tax resolution cases are resolved with the Offer in Compromise. The others are usually a form of IRS Payment Plan.
There are new variations on the same theme being touted daily through many television commercials, and infomercials, insinuating that you won’t have to pay more than, maybe 60% or 80% of the amount due, at the most. When you hear things like percentages, alarm bells should go off, and you should immediately bail out of the conversation. There is no way anybody can guarantee that they can cut tax obligations by any amount until they’ve discussed the matter with the IRS. Period.
Or, how about when they insinuate that they can make your tax debt disappear like magic. These types of liars are much akin to those snake-oil pushers of old. Don’t be fooled by them. Many of them have what can be referred to as a “churn and burn” mentality toward their Clients. Often, they will employ pushy and aggressive methods to collect money and do very little to represent the taxpayer afterward. Then, they move on to the next desperate and unwitting caller as fast as they can. Poof! They’re gone. There’s the magic you were promised.
Wow, that’s terrible. Is there anything else I should know before calling the TV commercial people?
Most of the big tax resolution chains like JK Harris, Ronnie Deutsch, and Tax Masters went bankrupt from all of the lawsuits against them. There have been suits by many Attorney’s General of various states against some of them. There are remnants of these companies around still, using different names now. As a matter of fact, I would venture to say that the majority of the tax resolution companies operate in some manner that is unscrupulous at the very least. They promise the moon; collect a fee that is just some number they pulled out of the air, and then, do little or nothing, in many cases.
The California Attorney General’s Complaint against one firm alleges that when a client fails to make a scheduled payment due to the firm, collection personnel from the firm will call up the taxpayer. During the phone call, the collection person will routinely use aggressive, rude, and harassing language to collect the balance, including screaming and cursing at their clients.
It has been alleged that some of these companies will send people letters requesting information while at the same time setting a short time-frame in which to fulfill the request. Then, if the requested information isn’t received by such and such a date, the company will close your file and keep the money you paid to them.
Tax relief companies use the radio, television and the Internet to advertise help for taxpayers in distress. If you pay them an upfront fee, which can be thousands of dollars, these companies claim they can reduce or even eliminate your tax debts and stop back-tax collection by applying for legitimate IRS hardship programs. The truth is that most taxpayers don’t qualify for the programs these fraudsters hawk, their companies don’t settle the tax debt, and in many cases don’t even send the necessary paperwork to the IRS requesting participation in the programs that were mentioned.
Some taxpayers who filed complaints with the Federal Trade Commission (FTC) reported that, after signing up with some of these companies and paying thousands of dollars in upfront fees, the companies took even more of their money by making unauthorized charges to their credit cards or withdrawals from their bank accounts.
Save yourself some aggravation by ignoring promises from businesses that say you “qualify” for a tax relief program to resolve your tax debt. Only the IRS or your state comptroller can make that determination.
I’ve seen some of these companies that are run by ex-IRS revenue officers. That sounds like a good idea! They should know all about what to do, right?
Ha! Now, that’s what I want. Let me have an obnoxious ex-IRS agent that spent the majority of his life screwing taxpayers out of money to represent me. This ex-IRS agent probably has a pension from the government after retiring from the IRS, for which taxpayers are still paying. This is the same heavy-handed ex-IRS agent that would freeze bank accounts and garnish the wages of everyday people who are just trying to make a living out there. Weren’t they just doing their job when they were using all of the strong-arm tactics instilled in them by the most powerful collection agency on Earth? It’s OK, he now wants to be on the other side of the fence and be the good guy for a change. That’s so nice of him. Besides, most of them don’t even know tax law. They usually only worked in some sliver of an area with no exposure to the wide world of tax law during their career at the IRS. They generally have a narrow field of limited knowledge and aren’t good taxpayer advocates overall. I’ve seen the light!
Shouldn’t I really be talking with a LICENSED professional about my tax problem when I call a company for help with my tax issue?
Certainly, it would be a good idea to ask about the qualifications of the person you are speaking with in your “consultation”. If you are speaking to a sales rep at one of those large, nationwide tax resolution chains, that person is most likely in no way qualified to be giving you tax advice. Usually, that person on the phone telling you what your resolution options are doesn’t know the first thing about tax law, and is not even legally entitled to be offering you tax resolution advice in the first place. The fact of the matter is that if they are not an Enrolled Agent, a licensed attorney, or a Certified Public Accountant, they are not authorized to give you advice or represent you before the IRS. So, ask your “consultant” for their LICENSE NUMBER. This could be their bar registration number for attorneys, state license number for CPA’s, or Treasury Department Enrollment Number for Enrolled Agents. If they’re not licensed, and they’ve been giving you tax advice, you need to disregard the majority of what they may have told you about your resolution options, eligibility for IRS programs, and other matters related to tax law itself.
When you call MIS Tax Pros you will talk to a licensed Enrolled Agent who will give you a realistic outlook on your case. If we cannot help you, we will let you know that.
There are a lot of tax representation companies advertising on the Internet. Shouldn’t I just use one of those to help me?
Many of the websites out there, as well as many of the ads you hear on radio or see on TV are just run by referral companies that sell your information off to other resolution companies. This is a very common practice that is prevalent today. They will collect your information on the web site or over the phone and sell it off to another company. Before long, you’ll get calls from companies promising to get it all fixed for you.
What are some other things to do when selecting tax representation?
Getting your tax situation straightened out can cost thousands of dollars. The result you derive from that expenditure directly impacts your personal and/or business financial future. You want to make a well-informed decision. Many times the amount you pay for resolving a tax matter is saved in the long run versus just ignoring the problem and letting penalties and interest continue to explode the bill. Other times, a tax bill can be reduced in total so there is actually more gain from the savings than the fee you have to pay to accomplish the savings. This is what we strive to obtain for our Clients. In this way, many times you can actually save money by getting your tax matters handled now instead of waiting!
Shop around. Not all tax resolution services are created equal. Get multiple quotes from multiple companies. Make sure that you are comparing apples to apples, though. Make sure you are comparing fee quotes for the same services.
Get it in writing. If the firm won’t give you a contract, with the services to be rendered explicitly stated, then RUN very quickly, in the opposite direction. Many tax resolution sales closers will promise you the moon, and say anything to get you to sign and send a check, but read the contract carefully. If it’s not in writing, it doesn’t count. Know what services are included and what services are not. Does the fee include filing any tax returns that you are missing? Does the service include Appeals that may need to be filed? What about requesting releases of levies and wage garnishments? Are there extra fees for those specialized and strategic filings? Are both of your companies included in the fee, or just the one you initially spoke to them about? These are all very important questions you need to have answered before you send them a dime.
When you hire MIS to resolve your tax issues, we guarantee that your case will be assigned to a highly qualified Enrolled Agent that will deal with you directly. You will be able to contact your Enrolled Agent at their phone extension. We further guarantee that your case will not be handed over to some case manager that doesn’t know the first thing about handling tax relief cases.
Unlike the national chain tax firms, small firms made up of quality independent Enrolled Agents can provide Premium customer service throughout the resolution process. These smaller firms tend to maintain a balanced case load while focusing on providing quality tax relief services for the Client. It is not a good idea to hire a company that uses administrative staff that know little, if anything, about tax law, to provide tax resolution services. That’s what most large national firms offer.