Question: I hear these commercials on the radio for tax relief. One of them has Alan Thicke, the ’80s TV actor. He says “the IRS is cracking down this year, you need to take action now.” He says his “team” can get me the “best settlement possible.” How is that so? Is this a scam?
— Brian in Arizona
Howard Dvorkin CPA answers…
First, the IRS isn’t cracking down “this year” — it cracks down every year. If you owe back taxes, the IRS will find you. If not today, then soon.
Second, there are many legitimate firms that can help you negotiate with the IRS for back taxes, tax liens, and tax penalties. Then again, there are many who promise much more than they deliver, and charge much more than they should.
So what should you look for in a firm that promises to settle your tax problems?
Five key questions…
- Are they experienced tax attorneys? If not, they can’t really help you. A law degree is not enough.
- What does the Better Business Bureau think? Don’t go anywhere that doesn’t have an A-plus rating from the independent BBB.
- What do satisfied customers think? The best firms actually post video testimonials.
- Do you get a plan or a promise? We’re all familiar with sales talk: the hype, the vague reassurances. The best firms give you the facts in plain English.
- Do they want you to pay in advance? That’s the telltale sign of a disreputable firm. In fact, a reputable firm will answer all your questions about pricing, but never charge you up front.
If you don’t want to spend hours sifting through tax attorney websites, Debt.com offers referrals to legitimate firms that not only obey all the rules I cited above, they also must sign Debt.com’s Code of Ethics.
I always urge people with tax problems to carefully consider seeking help. Frankly, the IRS doesn’t care if you seek help, and it doesn’t care if you receive bad advice. It simply wants to resolve issues as fast as possible, since it has a huge backlog of cases and an ever-shrinking staff to work through them. So if you do hire a flimsy firm, you could end up owing the IRS more money.
Just to stress what’s at the end of the video: If you receive a suspicious IRS letter, go to the U.S. Treasury’s scam alert webpage to learn more. You can also call 800-366-4484 to report it. If you’re concerned about these scams in general, and about identity theft in particular, I suggest you read Debt.com’s report on Identity Theft Basics.