There is an exploitation of Americans taking place.
The Target: Americans who have fallen behind on their taxes.
The Perpetrators: High Pressure Telemarketers who use scare tactics and demand to be paid thousands, with no clear plan of action to resolve the Tax Debt issue.
Why the campaign of harassment?
Perpetrators prey on people, knowing these factors to be true:
1. Many are uncomfortable or unsure how to deal with the IRS on their own and dont know where to turn for help.
2. Americans are often so overwhelmed that they fall for the too good to be true offers telemarketers make
3. Victims aren’t talking about their experiences of being harassed out of fear of what their friends and family might think (no one likes to talk about their tax problems).
The Truth of the Matter:
Most national Tax Debt Resolution firms pay commissions to high pressure telemarketers who use scare tactics, literally, to get people to sign agreements. Many of these telemarketers are unlicensed, and have never prepared a tax return. One trick pony- Telemarketers promise to wipe out Americans debt for pennies on the dollar; proposing to do so with what is known as an Offer in Compromise or the Fresh Start Initiative(again, bear in mind that these folks are not licensed to offer tax advice). So, after the fee is collected and the cases are reviewed by an actual licensed CPA or EA, it is found that they -more often than not- do not qualify for this program. Only CPAs, Enrolled Agents, or Attorney’s are authorized to represent the Taxpayers before the IRS. In my tax practice, it’s not uncommon for me to hear that my new clients have already paid out between $2,000-4,000 to so-called tax debt agencies, without getting any sort of resolution, BEFORE they come to me. Some interesting statistics that need to be revealed now: 13.3 Million Americans are in IRS Collections! That’s approximately 1 in 24 people. Less than 1% of tax debts were resolved via Offers in Compromise in 2015.
What is the Solution to this growing problem of harassment to already down-on-their-luck Americans?
1.If a representative of a tax debt resolution company is raising their voice at you or threatening you to sign or pay, it is a good indication that they are NOT affiliated with a reputable company. Do NOT give these people your credit card.
2.Go Local – Let’s shut down these national scam companies by bringing Tax Debt Resolution back into our local tax preparer’s offices.
3.Interview your Tax Debt advisor; 1. Ask them if they are licensed! 2. Ask them if they are trained in Tax Resolution strategies 3. Ask them what their fee includes, and is it possible that their fees will change (if you’re talking to a sales person, the fee will most likely go up after a licensed professional looks at your case)?
4.If you are offered an Offer in Compromise (OIC), ask what will happen if the OIC is denied by the IRS? What will be Plan B? Will you be charged another fee for Plan B?