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Tax Resolution Scams Still Going Strong

It amazes me that the old school boiler tax resolution firms are still out there.


A taxpayer who is called or calls the tax resolution firm is connected with a high-pressure salesperson, and maybe with two or three of them (often times a "manager" comes on for good measure). The taxpayer is assured that the firm will settle and resolve the taxpayer’s tax obligations. The salespeople earn commissions and large bonuses. Tax resolution firms take large retainers, anywhere from $2,500-$10,000+.


The taxpayer somehow is able to come up with the retainer money and that money is burned through with over and double billing in a month or two with very little progress. To bill down the clients retainers employees of the tax resolution firm send the taxpayer boilerplate letters requesting information by artificial deadlines. When there is no response to the letters, the associate heading the case will write what is called "a money letter" followed by several "money calls" to harass the taxpayer for additional retainer funds.


If the taxpayer is unable to pay the tax resolution firm they will deem the case closed and revoke their contacts with the IRS and state taxing authorities, with the taxpayer realizing no resolution or relief. If the taxpayer requests a refund of fees paid to the tax resolution firm, the firm will run through the retainer billing statement and make adjustments to ensure all the retainer is used up.


The tax resolution firm is able to get away with this due to the fine print in the retainer agreement which the tax resolution firm required the taxpayer to sign prior to beginning representation.
The majority of the time taxpayers cases are worked by people called "paras", i.e. a 'paralegal' with no formal schooling. These 'paras' at tax resolution firms are not subject to any professional regulation, evidenced from their low salaries of $12 an hour-but will bill taxpayers up to $300 per hour for clerical work.


Eventually the taxpayer figures out she has been had and throws in the towel. By the end of the taxpayer's relationship with the firm they end up owing more to the IRS than they did when they started with the tax resolution firm due to additional accrued penalties and daily compounded interest. I offer an alternative to these run of the mill tax resolution companies by helping taxpayers either resolve their own debt or by representing them before the IRS for a small monthly fee.


Contact me to get it done right!

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