Tax Resolution Scam Protection TipsSusan Letizia
Tax Resolution Scams Continue to Proliferate – 5 Ways to Protect Yourself
Tax resolution scams are a constant threat for those attempting to alleviate their IRS problems. Getting in trouble with the Internal Revenue Service is not fun. Getting that dreaded letter in the mail can make your blood run cold, and cause your mind to start racing. You begin wondering what will happen. Will you end up owing thousands? Could you possibly face prison?
To get your IRS problems resolved, you – like many others – may take to the Internet and buy into ads promising instant tax debt relief. You know that adage about things that sound too good to be true probably are? That applies here because buying into these false promises is a good way to get caught up in a tax resolution scam.
Here is how to protect yourself from these unscrupulous individuals and services who only seek to separate you from your hard-earned money while offering nothing but a lot of smoke and mirrors in return.
What is a Tax Debt Resolution Scam?
A tax resolution scam is when a scammer poses as a legitimate tax professional and makes a too-good-to-be-true tax relief offer.
These scammers are successful because they can exploit the public’s ignorance with regards to the inner workings of the Internal Revenue Service. The tricksters make outrageous claims, but many times the products they offer are based on real-life programs created by the IRS.
Legit IRS Offers vs. Tax Resolution Scams
Unbeknownst to many, the IRS offers a variety of programs to help debt-ridden taxpayers resolve their problems. The most common of these IRS backed debt relief programs include Offers in Compromise and Installment Agreements.
Offers in Compromise
These programs allow you to negotiate a settlement to resolve your IRS tax problems. In most cases, you will pay less than the full amount you owe.
Most people will be familiar with installment agreements, which allows you to break your tax bill into more manageable monthly payments.
Taxing Advantage of IRS Tax Resolution Programs
If you wish to take advantage of one of these tax debt relief programs, and for best results, you are encouraged to hire a legitimate tax professional, such as an Enrolled Agent. While hiring a tax professional is not absolutely necessary when using one of these IRS programs, you are more likely to be successful in resolving your debt problems by getting qualified advice.
Most taxpayers are simply unequipped to deal with the IRS all on their own. Therefore, enlisting a tax professional’s help to resolve your taxes is the best idea.
How Taxpayers Get Roped into Scams
Scammers posing as tax professionals or even IRS employees use these programs as bait to reel unsuspecting taxpayers in. The scams usually work like this: The scammer makes an incredible offer to resolve your debt for much less (offers in compromise) or for ultra-low payments (installment agreements). The scammers then charge the duped individual upfront with a non-refundable fee. In some cases, the scammers will keep the communication up for weeks or months, thus siphoning even more money from the poor victim before the scam is revealed.
The victims only know they’ve been duped when their money’s gone and yet they get a message saying they no longer qualify for the debt relief program, or that the IRS has rejected their offer.
Out of money and with nowhere to turn, the victims are left feeling less-than-smart and embarrassed with little hope of recouping their lost funds.
How to Spot a Tax Resolution Scam
There are some red flags you can watch out for that can help you identify these tax relief scam artists. Looking for red flags in a tax resolution service can be difficult because scam artists use the same language and make similar offers as legitimate tax resolution professionals. You may see ads for offers in compromise and installment agreements, but also penalty abatement, and innocent spouse relief.
The difference between good tax resolution companies and all the crooks out there trying to steal your money is that legitimate companies will never:
- Make Incredible Promises: A scam artist might try to convince you that you are guaranteed to qualify for one of the IRS’s brand-new programs that are only available for a limited time, or that your debt can be eradicated for pennies on the dollar.
- Guarantee Debt Forgiveness: This is another grand claim often made by tax resolution scammers. Only a thorough review of your tax profile by an experienced tax professional can yield relevant advice that can lead to IRS debt relief, but debt forgiveness is unlikely.
- Charge Hefty Fees Up Front: You know it’s a scam if you are asked to part with more than you’re comfortable with for services not yet rendered. Do your homework before authorizing the payment or you may never see that money again.
- Use High-Pressure Tactics: If the “tax professional” you are speaking with uses threatening language or makes you feel rushed or anxious in any way, you’re likely dealing with a tax resolution scam artist.
- Offer Continued Delays: You keep paying the money and yet your issues never seem to go away. Run, as you have probably been giving your money to an unscrupulous individual only posing as a trained tax agent.
Two other red flags include:
- Not Local: If the company is located oversees or somewhere that is nowhere near your zip code, look for areas closer to your location. You’ll likely save money and the headache that comes from being taken in by a tax resolution scam.
- No In-Depth Analysis: A real tax professional will take the time to analyze your tax profile. Only a careful assessment will produce the information necessary for an effective tax resolution plan. If the “tax expert” only performs a cursory investigation into your finances, you might want to stop all communication and look for someone legitimate to handle your IRS problems.
Phishing & Phone Scams
The above red flags can show up whether the scam artist called you, or you called them. Phishing and phone scams are also on the rise.
Phishing is when you receive an email or other communication and you click on a link or leave your information suspecting it’s a legitimate source. Scammers can forge IRS emails that appear legitimate. By leaving your social security number and other information, you give these scammers more than they should have, and your entire financial life could become compromised.
To guard against phishing scams, always look to see that the source of the email or communication is legitimate before leaving any personally identifying or otherwise sensitive information.
Phone scams are proliferating also, where scammers posing as the IRS demand instant payments of your debt. In some cases, the scammers spoof their phone numbers so that your Caller ID shows they’re calling from inside an IRS office. Don’t be fooled.
The IRS usually sends letters. You are unlikely to get a phone call, and certainly not a threatening one demanding to be paid now.
You can learn more about these types of tax resolution scams by visiting IRS.gov.
Have You Been Solicited by a Tax Resolution Scam?
By now, you know that real tax agents, CPAs, and employees from the IRS will never use high-pressure tactics and make grandiose claims while charging exorbitant up-front fees. If you have experienced any of these red flags from actual scam artists, you are encouraged to report the scam directly to the IRS.
Call SCL Tax Services to Resolve Your Tax Problems
When you are stressed and facing IRS debt or another issue that needs resolving fast, like an upcoming audit, call the tax experts at SCL Tax Services serving you in and near Bronx, Eastchester, Westchester, Mount Vernon, Yonkers and other cities in New York. Our licensed tax professionals will provide you with a full review of your tax profile before creating a detailed tax resolution plan. If you qualify for an IRS program, we can help you take advantage of those plans for immense savings and peace of mind.
Don’t get taken in by tax scams of any kind. For legitimate tax resolution services, call now and receive a free 15-minute tax consultation.