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At Solvable, we care about your financial well-being and are here to help. Our research, articles and ratings, and assessments are based strict editorial integrity. Our company gets compensated by partners who appear on our website. Here is how we get compensated.
At Solvable, we care about your financial well-being and are here to help. Our research, articles and ratings, and assessments are based strict editorial integrity. Our company gets compensated by partners who appear on our website. Here is
A few unscrupulous companies lurk among the largely legitimate tax relief services industry, looking to scam people. These unethical companies carry out malpractices such as promising unrealistic results, charging excessive fees and hidden fees, and misleading advertising. They do little to nothing to resolve the tax issue of their client. In the end, their victim is left with a loss of hundreds of dollars in fee with no returns.
What To Do Before Hiring a Tax Relief Company
There are a few ways to find out whether a tax relief company you are looking to hire is a legitimate service or not. Before you hire a service, conduct thorough research online and offline. While researching, you may check these points:
The company’s background – how many years they have been in service, where they are located, how many staff members they have, etc.
Their professional’s qualifications and experience
Reviews and testimonials from customers at various platforms, including social media
Reviews from friends, family, and neighbors
What kind of tax services they offer
What is their success score
The research work might take you some time, but it is important to know whether the service is legitimate and competent prior to hiring. This is an important step and will decide how well and easily the resolution will be achieved. So, take your time researching and don’t shy away from seeking help from friends and family.
How a Scam Tax Relief Company Operates
A scam tax resolution company’s primary aim is to give as little service or no service and charge substantial amounts in fees. These companies also often charge a hidden cost, of which their client is totally unaware.
To trap people into hiring their service, they promise unrealistic results. They dupe people by claiming that they can substantially reduce their back taxes, sometimes to zero, without knowing the particulars of the case. Quoting the IRS’ tax debt resolution plan, Offer in Compromise, they promise exaggerated tax debt reduction to anybody just so that they get hired.
This particular scam is so rampant that it has made it to the IRS Dirty Dozen Tax Scams list for 2020. According to the IRS, “Taxpayers need to wary of misleading tax debt resolution companies that can exaggerate chances to settle tax debts for ‘pennies on the dollar’ through an Offer in Compromise (OIC).”
These companies never tell that an Offer in Compromise has strict qualifying factors that not all taxpayers can fulfill. They make it sound like they can get anybody’s back taxes reduced substantially. “These scams are commonly called OIC’ mills,’ which cast a wide net for taxpayers, charge them pricey fees and churn out applications for a program they’re unlikely to qualify for,” the IRS explains.
If you contact a tax relief company that promises you results that are too good to be true, get cautious. It might be a scam company.
Red Signals to Watch Out For
Most scam tax relief companies use similar strategies to dupe people. Here are the red signals to watch out for:
Sizeable monetary gains – They promise you that you’ll be saving a lot of money if you hire them.
Misinformation – They may hide information from you or give you incorrect information regarding what they can do for you, about IRS tax debt resolution plans, IRS rules, etc.
Excessive fees – These companies charge exorbitant fees and use misleading advertising to portray themselves as well-known legitimate companies.
Hidden fees – They often charge a hidden fee after you have hired them.
Little to no progress on resolution – You may find that there is little to no progress on your case even after weeks or months of hiring them.
Unnecessary delays – They may intentionally cause delays to extract more money out of you.
Back Taxes and Fraudulent Tax Relief Companies
Since back taxes are a typical tax problem that many taxpayers face, fraudulent tax relief companies are most active there. Even though many scam tax relief companies have been exposed and closed down, there still remain a few who indulge in malpractices. So, if you are considering hiring help for tax debt resolution, you may come across fraudulent tax relief companies with the face of an honest company.
Having basic information about back taxes resolution can help you to spot a fraudulent company. For instance, if you are aware that one major condition for tax debt reduction is the taxpayer doesn’t have the financial capability to pay the entire amount, then if a tax relief company tells you that you qualify for back taxes reduction when you can afford to pay it, you know the company is a fraud.
It will significantly help you to avoid fraudsters if you acquaint yourself with the basics of back taxes resolution such as the various IRS tax debt resolution plans, IRS notices for back taxes, and IRS penalties and interest. Armed with the information, you can steer clear of frauds and choose a legitimate tax relief company that will achieve the most favorable resolution for you.
What Can an Honest Tax Relief Company Do for You
A legitimate and trustworthy tax relief service will help you smoothly resolve your tax issue, offer help with the paperwork, negotiate with the IRS, and stop aggressive IRS actions such as liens and levies, IRS audits, and back taxes resolution, and more. They have a team of qualified tax professionals such as tax attorneys, enrolled agents, and other tax professionals to achieve a quick and beneficial resolution even in the most complicated tax cases.
In back taxes resolution, a trustworthy tax relief company can reduce IRS penalties and interest and/or reduce the back taxes amount depending upon the case. They can also stop a lien or levy, respond to IRS notices, represent you before the IRS, negotiate with the IRS on your behalf, and more.
If you hire an honest tax relief company, you can rest assured that your tax problem will be resolved smoothly, but picking the right service for the job needs a little research. It is all worth it because it protects you from unscrupulous companies that only exist to rip off people in trouble.
Solvable is a for-profit company that helps customers resolve their tax problems, but a free service for consumers. Partners cannot pay us to guarantee favorable editorial reviews or ratings. We do not publish favorable (or unfavorable) editorial reviews or assessments at the direction of an advertiser or partner. We always work to put consumers first and do our best to provide value in meaningful ways, but our reviews are subjective.
How We Make Money
Solvable is compensated by some of the companies seen on our website. Most often, Solvable receives fees when one of our readers clicks, fills out a form, applies for, or receives a financial product from one of our partners. We also earn fees for capturing consumer stories and writing about them, displaying advertising, having our partners sponsor certain parts of the site, and writing content that may be relevant to our partner and their audience. This compensation may impact where products appear on this site, including article pages, comparison listings, the order in which they appear or if they will even appear on a given page, and our matching recommendations. Solvable has not written about, reviewed, or rated all financial products available to consumers.
In addition, we may be compensated in the following ways:
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Marketing tax resolution, tax preparation, tax audit help and general tax assistance.
Referrals to services that help consumers with tax resolution, tax preparation, tax audit help and other tax issues.
We do recommend that you shop around and compare services and costs with other companies while performing your own due diligence, especially since people’s experiences with companies can change over time.
Free Solvable Services
The offers that you are matched up with are from companies or attorneys/law firms that we may receive compensation from. Based on our initial review of such companies or individuals, we feel comfortable introducing them to our readers. We won’t recommend something just because we’re offered payment to endorse or promote it. However, we do recommend that you shop around and compare services and costs with other companies while performing you own due diligence, especially since people’s experiences with companies can change over time.
We are not attorneys and we don’t provide legal advice. As always, we encourage you to do your homework and check out individuals and companies before you hire them. If you are already working with an attorney, we urge you to ask them your questions. After all, they will be familiar with your situation and the laws in your state.
We hope that you find Solvable helpful in your efforts to get a fresh start.
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Congrats! You're One Step Closer To Resolving Your Tax Debt.