During the last decade, there has been a growing increase in the number of national tax agencies and resolution services.
These companies often advertise heavily on television, radio, or the Internet, and often promise to solve any tax problem for pennies on the dollar or a low flat rate.
We have developed the following list to assist taxpayers in selecting representation in their IRS or state tax matters.
Do your due diligence on who represents you
We have found that many people will choose representation because of an advertisement they saw on television or in print. It is dangerous to trust advertising without knowing the track record of the company you are dealing with.
One of the best ways to check out tax relief services is through the Better Business Bureau (www.bbb.org) or by looking at the lead attorney’s credentials and complaint history through your local bar association’s website. condition.
Make sure you know who you’re talking to
Get the person’s name and position in the company. Ask to speak to an attorney when discussing your tax problems.
Conversations you may have with an attorney who works at a tax relief firm may not be privileged because most taxreliefservices relief firms are not law firms.
Be very wary of fixed rates quoted over the phone without gathering more detailed information
Determining whether or not a taxpayer is current, what years they have outstanding liabilities, and how much they owe in total are important facts to understand.
Agencies that fail to ask these questions before quoting a client a flat fee can often miss critical steps in the collections process.
These mistakes will often cost you money or may create unnecessary steps in what can be a fairly simple process. Also, keep in mind that the fees charged by tax relief firms are not like those charged by law firms.
Tax relief companies can do whatever they want with your money once they take it, regardless of the work they do or don’t do.
Don’t hire someone for an Offer in Compromise (OIC) without first determining if they qualify
Worse yet, some of these tax relief companies may not file Offers in Compromise for qualifying taxpayers because they are more concerned with a quick response to the case than spending a few more months trying to get the best result for their clients.
While it’s true that you may be able to settle your outstanding tax liability for pennies on the dollar, the IRS only accepts Offers in Compromise from people who meet strict asset, income, and expense guidelines.
Contrary to what many ads may claim or suggest, offers in compromise are the exception rather than the norm. The Internal Revenue Service (IRS) isn’t freely handing out “fresh starts” to tax-strapped people.
Responsible tax professionals will generally screen prospective clients to determine if they qualify before accepting a retainer or submitting an Offer in Compromise on your behalf. National tax agencies will often take the advance first without taking into account your chances of acceptance.
Worse yet, they mislead a customer into believing an Offer in Compromise is possible when a customer clearly does not qualify.
Compromise is possible when a customer clearly does not qualify
IRS agents, like revenue officers, frequently visit taxpayers’ homes and businesses. They may conduct face-to-face interviews with taxpayers or even summon taxpayers to appear before them.
If you hire a local attorney, that attorney must be in the room with you for any in-person meetings you may have with IRS agents.
Questions to ask your tax representative:
- Who will handle my IRS Collections matter on my behalf? How can I contact this person?
- If this person is not an attorney: Who is the supervising attorney? Where are they certified? You should check their bar record and do other research on this person before hiring the company.
- How many tax attorneys do you have on staff? How many active cases are you currently handling?
- What is your success rate?
- How do you evaluate offers in compromise before you send them?
- Do you have all the information you need for my case (have they done any analysis)?
- How does your pricing structure work? What is the rationale behind this?
- What are examples of results you have achieved? Can you give me an example of someone you have helped with an asset/income/tax liability profile similar to mine?
If you have any questions or if we can help you further, please contact our San Diego, El Cajon, or Orange County offices.
