Common Tax Relief Scams
You’ve heard the commercials proclaiming, “We solve your tax problems for pennies on the dollar!” But as the saying goes, if it sounds too good to be true, then it probably is. As former IRS agents, we’ve seen some crazy tax relief scams, but they all have common traits. So to ensure you’re aware of tax scams and their characteristics, here’s an outline of the most successful ones.
Tax Relief Scam No. 1: Misrepresenting Potential Outcomes
This scam typically begins with deceptive advertisements claiming to reduce a taxpayer’s tax liability for pennies on the dollar. These claims are heavily utilized online and through mail disguised to look like official IRS notices. What’s more, they typically use celebrities to endorse these unscrupulous tax relief statements.
Tax Relief Scam No. 2: Salespeople
Most of these fraudulent tax relief companies have salespeople who handle incoming calls. They’re not licensed tax professionals, and their only goal is to convince the victim they can reduce their debt. When they do this, the salespeople secure a nonrefundable deposit from them. Once the victim signs up via a contract, the company continues to charge them and take little or no favorable actions on their IRS case.
Tax Relief Scam No. 3: Shell Websites
Fake tax relief companies love the internet because it’s easy to appear as a reputable and full-service tax relief company with a nice website. They usually tout their Better Business Bureau rating and generously use well-known tax relief slogans. Most of these sites have contact forms on every page and fail to identify any licensed tax professionals that work for them. When a taxpayer enters their contact information, the aggregated data is sold to businesses that use salespeople to solicit you by phone, mail, or email. To prevent this from happening to you, it’s best to “interview” the tax firm you want to work with. When you do this, start by asking about their credentials and true experience. Remember, only Enrolled Agents(EA), CPAs, and tax attorneys are permitted to represent taxpayers in front of the IRS.
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