Tax Settlement Scams: An Insider’s Guide - financial services

IF YOU ARE DEALING WITH IRS DEBT, unfiled returns, penalties, or collection notices, you are likely flooded with dozens of tax relief companies promising quick fixes and massive settlements. Most taxpayers don't know how to evaluate these companies.

Before hiring anyone—including us—here are some things you should know.

MY 33 YEARS OF EXPERIENCE IN TAX SETTLEMENT/LAW/FINANCE: WHAT YOU NEED TO KNOW

I am the principal of Tax Relief Advisers. I have a Juris Doctor in Law and an undergraduate degree in Business Administration. I am an IRS Enrolled Agent, and YOUR advocate.

Here are the rules to protect yourself:

RULE #1: Do Some Research (Audit the Website Before You Dial)

Go to the website before you call. Find out where the company is located. Does it tell you who owns the company? If the website starts with "How much do you owe," MOVE ON.

RULE #2: The Truth About Reviews

Read the reviews and ignore the rating. The BBB is the best of the group because they contact the reviewer and verify. Companies buy positive reviews, but you can generally trust bad ones are accurate. After all, companies don't hire people to write bad reviews—and true fake ones can be removed if a company proves the reviewer, wasn't a client. YELP, Trustpilot, ranking articles, etc., are pay to play.

RULE #3: Avoid the Boiler Rooms

Do not call a company from a radio or TV spot. Many of the large companies saturating the market today are Wall Street-backed organizations, mostly based in Southern California. Their business model is simple: hire commissioned salespeople who work in a boiler room and read from a script. Typically, they have no tax training. They don’t know a lot about ethics or tax. They are trained to SCARE you.

RULE #4: Demand Credentials From Anyone You Talk To

Are you speaking with a licensed tax professional, or a commissioned salesperson with no tax credentials? If they are not licensed, MOVE ON. You have no legal recourse if you are talking to an unlicensed person.

RULE #5: If the Settlement Isn't in the Agreement, It Isn't Real

The most abuse I see is the claim to be able to settle debt with the IRS through an Offer in Compromise.

RULE #6: Look for Personal Experience, Not Marketing Generalities

Ask for credentials. Because you likely don’t know much about this process, you can’t evaluate the accuracy of what you are being told unless you research. If you are getting generalities, a quick fix, or no clear expectation, MOVE ON.

RULE #8: Never Pay in Full Upfront or Let a Company Sign You Up for a Loan

The lenders are 3rd parties who charge interest on top of fees, and the tax relief company is paid in total up-front. DON’T DO IT! If they fail to do the work, you lose all your leverage.

YOUR NEXT STEPS

If you're dealing with IRS debt, notices, unfiled returns, payment plans, penalties, or want to see if you genuinely qualify for an Offer in Compromise, we're happy to review your situation honestly and explain your options.

• CALL: •••-•••-••••

• VISIT: www.taxreliefadvisers.com

Lance Herndon, J.D., EA

IRS Enrolled Agent

Tax Relief Advisers