The IRS is offering tax relief to more people than ever before through the Fresh Start Initiative, and it seems everyone from local businesses to national corporations are coming out of the woodwork to sell you a miraculous solution to your tax debt problem.
But there’s something a lot of these companies aren’t telling you.
Find out if you qualify for the Fresh Start Initiative
Many of these businesses are actually scammers who are only out for your money and will leave you even worse off than when you first came to them.
Sarah Doyle knows this firsthand. The Broomfield, Colorado native signed up with a well-known tax company two years ago after being promised huge reductions to her tax debt.
Instead, the company charged her $8,000, which she had to take out a loan to pay, and closed out her case without resolution. Plus, during the months her case sat idle, mounting penalties and interest caused her tax debt to balloon.
Doyle was devastated.
“I absolutely felt lied to,” she said. “Not only was the IRS still hounding me, but now so was the loan company. All they did was make a bad situation so much worse.”
Stories like Doyle’s serve as a warning for people who are considering working with one of these companies. But with so many choices out there, how do you know who to trust?
Here are four signs that a tax relief company might be a scam and steps you can take to ensure they are reputable:
Click here to see if you qualify for tax relief
1. They guarantee they will save you money or get your debt reduced.
This is one of the hallmarks of a dishonest company, as Doyle found out. A reputable business will tell you up front that the ultimate decision on which Fresh Start Initiative programs you qualify for is up to the IRS, not the company.
What a skilled tax professional can do for you is present your case to the IRS in a way that gives you the best possible chance of qualifying for these programs, and that’s where their true value lies.
What you can do: Ask the company if they can guarantee results. If they say yes, don’t move forward with them.
2. They don’t mention future fees up front.
Beware of companies that promise you an all-inclusive package for an attractively low price. A legitimate company will make you aware of any additional fees before you sign on with them.
What you can do: Ask the company if there will be any additional fees for follow-up services and review any documents carefully so you know exactly what you’re committing to.
3. They have been flagged by the Better Business Bureau.
The Better Business Bureau is one of the most trusted sources of information in determining whether a company is reputable, but the letter grade a company receives from the BBB doesn’t tell the whole story — even disreputable companies can receive a high score if they pay their accreditation fees on time.
What’s more important to review are alerts or government actions on the business’ page. These alerts could be for previous infractions the company or people associated with it have committed, such as fraud.
What you can do: Check to make sure the company doesn’t have any alerts or government actions on their BBB account. If they do, stop working with them immediately.
4. They don’t employ a tax attorney.
Tax attorneys are experts in their field, and they are required to uphold high standards of professionalism and moral integrity. No attorney would work for a company whose conduct could jeopardize their professional standing, so having a tax attorney on staff indicates that a company is reputable. Plus, you can rest assured that your case is receiving the utmost experience and guidance.
What you can do: Check the company’s website or ask a representative if they have a tax attorney on staff. If they do, you can search that attorney’s name on the state bar website for their state. This will tell you whether their license is in good standing.
Do You Qualify for Tax Help?
If you have tax issues, you don’t have to settle for scammers when there are honest companies out there that do good work, charge fair prices and have lots of happy customers. Click here to find out if a verified tax company can help you.