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With uncollected taxes approaching more than 280 Billion and rising, the Internal Revenue Service (IRS) has stepped up efforts to collect unpaid back taxes from individuals and businesses that have outstanding balances due.
Unfortunately, those who are can’t pay their back taxes can face severe penalties by the IRS, including the seizure of personal or business assets in some cases. In the wake of this dilemma, a new type of business has sprung up to help delinquent taxpayers cope with their tax debts.
Known commonly as tax settlement firms, these legal agencies claim that they can either drastically reduce or completely eliminate whatever the client owes the IRS. Unfortunately, the Tax Relief Industry has attracted circling vultures waiting to prey on those who are weakened by the threat of IRS action. Arm yourself with the tools necessary to defend against their self-serving actions. Start by informing yourself about some of the common tax relief scams below and reading our tips on how to protect yourself.
Tax Relief Scam #1 – Lead Generation Companies Posing as Tax Relief Experts
We all know companies buy and sell leads. Unfortunately, that applies to the Tax Relief industry as well. Companies that specialize in marketing will lead consumers into believing they are dealing with a firm that actually does the tax relief work, but do nothing more than sell the customer’s information multiple times to actual tax relief companies. This leads to never ending phone harassment as your information is sold over and over again.
These marketing companies have no control over the resolution process or even the quality of service, and in some cases, they will sign up a consumer with no intention of servicing the client whatsoever.
Tax Relief Scam #2 – Collecting Non-Refundable Payments Without Any Guarantees
One of the most common scams performed by unscrupulous companies is to collect payment for results they know are unpredictable, if not impossible, to achieve. You’ve probably heard the radio ads where former IRS agents claim they can settle your debt for pennies on the dollar? What they don’t tell you is that the IRS Offer in Compromise program is extremely difficult to qualify for.
Be weary of companies that ask you to commit a very large sum of money upfront before an investigation is conducted. Our Tax Relief experts have years of experience and they understand every case is different. The truth you won’t hear is not everyone qualifies for tax relief, but at Fidelity Tax Relief, we’ll do everything we can to help you and promise transparency and honesty during the process.
Tax Relief Scam #3 – The Outright Scam Artists
Unfortunately, there are some firms who have outright cheated and stole from their clients. These are the firms that are being targeted and shut down by the Attorney Generals and who have tarnished the industry. In these cases, the unscrupulous companies will enroll many clients into a program and collect their money without providing adequate services. Some don’t even send the necessary paperwork to the IRS.
As soon as there are too many complaints or upset consumers, the Company will simply change their name and start preying on consumers all over again. Adding insult to injury, many of these companies don’t provide refunds and leave people even further in debt.
When you are dealing with a new tax resolution company, ask yourself; does the company make a thorough assessment of the factors above? Do they emphasize the importance of these qualifications? Do they make it clear that an Offer in Compromise is difficult to obtain? If the answer to any of these questions is no, you may be dealing with a company that does not have your best interests in mind.