How to Spot an Unscrupulous Tax Settlement Company
There are many American tax payers who have fallen into trouble with the IRS due to mismanagement of funds or misunderstanding of tax laws, and unfortunately, there are also many dishonest tax settlement companies trying to scam these tax payers. If you are already facing serious tax problems, the last thing you want to do is have to deal with a deceitful tax settlement company. Read on to learn how to spot an unscrupulous tax settlement company.
You already know their name - and their promises
Once you know you are experiencing tax problems, or you know you will be receiving a visit from the IRS, the first thing you want to do is find a tax attorney or a tax settlement company. If you already know who to go to, because their radio jingle has been stuck in your head for days, it's probably an unscrupulous company. While this is not always true - there are many tax attorneys and settlement companies that advertise regularly - if their commercials are followed by cash-for-gold advertisements and check cashing offers, they're most likely bad news.
They promise too-good-to-be-true results.
Of course you always want the companies you do business with to be confident in their services, but if a settlement company makes you promises before even meeting you or discussing your case (or makes outrageous claims in advertisements, as mentioned above), your warning signal should go off. Getting the IRS to accept an offer or compromise on charges against you is extremely difficult, and is a very time-consuming and slow process. Even the very best tax attorney can't always make the IRS accept offers from certain taxpayers. If the tax settlement company claims they can solve your problem quickly with no problem at all, they are most likely taking you for a ride.
They don't ask you why you owe taxes during your initial consultation.
Sometimes what seems like a massive tax problem can be easily resolved by just sending in a few forms to the IRS. Genuinely experienced tax attorneys always ask questions regarding whether you really owe taxes first, before discussing an offer-in-compromise settlement. A deceitful settlement company knows that the big bucks are in the easier route of tax settlements and they are not actually interested in resolving your issues. If the company doesn't ask questions regarding the taxes you owe, and immediately suggests a settlement during your initial consultation, you should leave immediately.
Your down payment or deposit is the exact amount in your bank account.
Good or bad, a tax attorney will always ask you for a down payment or primary payment before starting your tax case. After all, it's just not smart business to take someone's case who can't pay (and someone who can't pay the IRS is very likely not able to pay their tax attorney). However, if the company bases your down payment on how much money you told them you currently have in your bank account, something is wrong. An honest tax attorney will determine your first payment based on how much they estimate your case will actually cost.
They have no local office.
On-the-fly tax settlement companies will often try to establish a local presence by using a virtual office or "rent a business address." When they give you their address, search for it online. If their business address is the same as 50 other businesses, they most likely are just renting their mailing address, and they have no actual office.
You have a different company representative every time you call.
If you suddenly have a new representative working your case every time you call the company, you are either dealing with a settlement company that has heavy employee turnover (and horrible HR issues), or the company just doesn't care about your case and how it is handled. When you call a trustworthy tax law firm you should be assigned just one tax attorney or representative. It is this person that you are trusting with all your finances and who is representing you to the IRS, so you want to make sure they have your best interests in mind.
Worse yet, you have no representative and they have your money!
Even worse than an ever-changing company representative is a representative that goes MIA after you have paid your initial deposit. If you have already paid your deposit, the money could be gone forever. Once this happens, your best bet is to report them to the Better Business Bureau, and for goodness sakes, do not pay them any more money!
They have a history of complaints.
Last but not least, it's always a good idea to do extensive research before you call up a tax settlement company. If you Google the company's name and you find a bunch of complaints online, they are not your best bet. Don't be afraid to go with your gut, and if you get a bad feeling from what you find online, trust your instincts and choose another company.
If you have already had a bad experience with an unscrupulous tax settlement company, you shouldn't be afraid to find another. You still need your tax problems resolved, right? There are many honest and ethical tax attorneys out there who will not take advantage of your vulnerable financial situation. When searching for a tax attorney or settlement company just remember these tips on how to spot an unscrupulous settlement company and you'll do fine.
About the Author
William D. Hartsock, Esq. of http://www.taxlawfirm.net/ is a Certified Tax Law Specialist, San Diego tax attorney and tax bankruptcy lawyer specializing in IRS tax problems who represents clients throughout Southern California (CA). Each tax attorney at Hartsock's TaxLawFirm.net helps to level the playing field when it comes to tax issues. If you need help with complex financial issues, contact William D. Hartsock, Esq. today.
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