With tax season here, consumers looking for relief on delinquent taxes may want a company to help reduce or settle their delinquent taxes. BBB cautions consumers to be wary of too-good-to-be-true tax relief advertising that offers to significantly reduce tax debt.
Recent television commercials from national tax relief companies claim they can settle delinquent IRS tax obligations for significantly less than the amount owed. Consumers may find that some companies promise more than they can ultimately deliver, not helping with tax problems as advertised and sometimes refusing to provide refunds when promised services were not completed.
“While there are many honest Enrolled Agents, attorneys and CPAs who work with the IRS to reduce delinquent tax liabilities for their clients, some firms may exaggerate or misrepresent their ability and expertise in effecting settlements,” said Matthew Fehling, BBB President/CEO.
BBB offers the following advice to those looking for tax relief:
- Exercise caution if the tax relief company states they can offer tax relief without meeting you or without discussing specifics about your tax debt issues, including why you are having problems with payment of the delinquent taxes.
- Ethical Enrolled Agents, tax attorneys and Certified Public Accountants will estimate how much your case will cost and may ask for an upfront deposit based upon that estimate before starting a tax settlement case. Be cautious if the tax relief company asks for a large upfront fee without knowing your individual case.
- Does the tax relief company have a physical location? Be cautious if the only address you have is a post office box or website.
- Be wary of guarantees. A reputable tax practitioner will not guarantee a tax liability reduction.
- Be cautious if the company states you are required to pay for services before they provide a copy of the contract and policies for you to review and sign.
- If the promises made by the tax counselor or company sound “too-good-to-be-true”—approach cautiously.
- If you have a delinquent tax obligation with the IRS, you may wish to consult with the IRS directly to see if you qualify for an “offer-in-compromise” or some other type of payment arrangement. You may also wish to seek the advice of an Enrolled Agent (a federally-authorized tax practitioner who can represent taxpayers before all administrative levels of the Internal Revenue Service), tax attorney or CPA.
- The IRS Office of Professional Responsibility (OPR) establishes and enforces consistent standards of competence, integrity and conduct for tax professionals (Enrolled Agents, tax attorneys, CPAs). You may wish to contact the OPR to determine if the tax professional you are considering is able to represent taxpayers regarding delinquent tax issues with the IRS. For more information about the OPR, visit the IRS website at http://www.irs.gov/irs/article/0,,id=175512,00.html
- Before dealing with a tax relief company, BBB recommends that you first check them out. BBB maintains a free online database with more than four million reports on businesses at www.bbb.org.
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