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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.
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 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.
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.
Most scam tax relief companies use similar strategies to dupe people. Here are the red signals to watch out for:
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.
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.