Having tax debt is stressful, and for most who want to get it resolved as quickly as they can, it can also lead to rash decisions when hiring a tax debt resolution company.
As with any industry, there are scam companies. Always make sure you fully investigate the tax debt resolution business you choose to hire for help to prevent being involved in a scam.
Tax Debt Scam Red Flags
When researching a tax debt company, look out for scam red flags that identify the business as a scam. Things like:
- Up-Front Fees Scam
- High-Pressure Sales Scam Tactics
- “Pennies on the Dollar” Advertising Scam
- Guaranteed Tax Solution Scam
Below, we will take a closer look at each of these scam tactics so that you are able to spot a scam company within a minute of speaking with them.
Scam Red Flag #1: Up-Front Fees
Many companies will discuss their services and the fees associated with those services, which doesn’t make the company a scam at all. However, when the company demands all charges be paid before the professionals start your case, the company is most likely more interested in collecting their fee than working to resolve your tax debt.
Scam Red Flag #2: High-Pressure Sales Tactics
Selecting a company to resolve your tax debt is a major decision that requires a lot of thought and consideration. Some tax debt companies will try and pressure you into making a decision immediately, berating you for wanting to consult your spouse or think it over. These scam companies are more sales-oriented with little experience in actually helping clients achieve a tax debt settlement.
Scam Red Flag #3: “Pennies on the Dollar” Advertising
When speaking with a tax debt company, you must be aware of three little words: Offer-in-Compromise. If the tax consultant says you qualify for an OIC before you are even a client, the company is a scam. The truth is the IRS accepts 14% of the Offer in Compromise applications they receive annually. Anyone who claims your case is eligible without first examining your tax situation and your finances is only trying to scam you out of money.
Scam Red Flag #4: Guaranteed Tax Solutions
While it isn’t unethical to boast about the company’s success rate, it is unethical to guarantee any tax debt resolution. There are numerous factors that influence the IRS’ decision. A professional tax debt consultant should never guarantee any resolution. If they do, then the company they work for is a scam. If a company is guaranteeing resolutions for your case, they are only trying to woo you with unrealistic results so they can scam you out of your money.
How to Avoid Scam Companies
When faced with a tax debt, it is important to stay calm and focused. Acting with too much haste may result in you hiring a scam company to handle your tax matter. Take these steps to avoid scam tax debt firms:
- Examine your tax debt and the tax resolutions available so you know if the tax professional you are speaking with is trying to scam you into hiring them with false promises.
- Verify each tax relief company’s Better Business Bureau rating. Check if they have been reported to the BBB for scam business practices.
- Do not sign any legal contract unless you are fully satisfied with the answers you received and the plan-of-action that was presented during your consultation.
- Most importantly, trust your gut. If you don’t have a good feeling about a company, then most likely it’s your body warning you it is a scam.
Tax Defense Network strives to give each client personalized service while resolving their tax issue. We make arrangements for our clients to pay as we work, and never suggest a tax relief program that is unattainable. We take pride in our A- rating with the Better Business Bureau and Chamber of Commerce membership. At Tax Defense Network, our goal is to help taxpayers resolve their IRS debt quickly and affordably. Remember, we will not take you on as a client unless we are sure we can help.
If you ever find yourself struggling with back taxes, use these red flag tips to filter through the scam companies who aim to scam you out of thousands of dollars while they do nothing to eliminate your tax debt issue.