4 Ways to Avoid Tax Resolution Rip-Offs
Protect yourself from unscrupulous tax resolution companies with these practical tips to identify legitimate help and avoid costly scams.
Verify Credentials and Qualifications
Legitimate tax professionals will have proper credentials such as:
- Enrolled Agent (EA) status with the IRS
- Certified Public Accountant (CPA) license
- Tax Attorney credentials (Juris Doctor + bar membership)
Always ask for credentials and verify them through the appropriate licensing bodies. Be wary of companies that use vague terms like "tax consultant" or "tax specialist" without specific credentials to back them up.
Understand the Fee Structure Upfront
Transparent companies will provide a clear breakdown of their fees before you engage their services. Be sure to:
- Get a written agreement detailing all costs
- Ask what services are included in the quoted price
- Inquire about any potential additional fees
Be cautious of companies that require large upfront payments before performing any services. Most legitimate firms will work with payment plans or charge reasonable initial consultation fees.
Research Company History and Reviews
Before hiring any tax resolution service, invest time in research:
- Check with the Better Business Bureau for complaints and ratings
- Search for independent reviews on multiple platforms
- Look for any disciplinary actions with professional organizations
- Verify how long the company has been in business
Be skeptical of companies with numerous complaints about hidden fees, failure to deliver promised services, or poor communication.
Be Wary of Too-Good-To-Be-True Promises
If a company makes extravagant promises, proceed with caution. Legitimate tax professionals will:
- Explain what's realistically possible with your tax situation
- Not guarantee specific outcomes from the IRS
- Acknowledge that resolving tax issues takes time
Be especially cautious of companies that promise to settle your tax debt for "pennies on the dollar" without first thoroughly reviewing your financial situation.
Legitimate Tax Resolution Options
If you're facing tax challenges, there are several legitimate options available through the IRS:
An agreement between you and the IRS that settles your tax debt for less than the full amount owed if you meet certain eligibility criteria. The IRS considers your ability to pay, income, expenses, and asset equity.
An installment agreement where you make monthly payments to the IRS, but the total of all payments won't pay the liability in full before the collection statute expires.
If you're experiencing financial hardship and cannot pay any of your tax debt, the IRS may temporarily delay collection until your financial situation improves.
A monthly payment plan that allows you to pay your tax debt over time. Various options are available depending on the amount you owe and your financial situation.
Requesting removal of IRS penalties if you have reasonable cause or are eligible for first-time penalty abatement relief.
Need Professional Help With Your Tax Situation?
Our team of enrolled agents and tax professionals has helped hundreds of clients navigate complex tax issues and find legitimate solutions. We offer transparent pricing and will honestly assess which options you qualify for.
Schedule a free consultation to discuss your specific situation and explore your options.
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