Perhaps you just did a search on the internet for tax resolution services from your computer.
You may be looking to resolve a tax liability or maybe you have years of unfiled taxes that you need to finally take care of.
Perhaps you heard a commercial on the radio or television about reducing your tax liability with a tax resolution services company.
The ad sounds great and you get connected to a persuasive " tax consultant..." likely in California, Colorado, or Florida.
The slick salesperson tells you what you want to hear. He knows you are scared and worried.
As a Long Island tax attorney that handles tax problems on daily basis, too many of my clients come to me after paying thousands of dollars to a tax resolution services company and being left in a worse off position.
In this article, I address what you need to know about hiring the right tax professional to help you solve your tax problems and why you should likely avoid tax resolution services companies.
The Ads Making False Promises
You may have heard the commercials or searched the internet and found those persuasive ads by tax resolution services companies stating “that your tax liability can be reduced to pennies on the dollar.”
" We can settle your tax liability for a fraction of what you owe..."
"We have tax attorneys on staff..."
“ As seen as on TV, CNBC, CNN, ESPN etc.”
Massive Advertising Budgets
If you look above this article when you did your search on the internet, you will see several advertisements from tax resolution services companies making these false promises and....
"Selling you the dream..."
Many tax resolution services companies have very aggressive sales tactics that prey on your desperation to solve a very serious tax problem.
In many tax resolution services companies, high pressure sales people are employed to work on the “front lines.”
On the front lines of many of these tax resolution services companies are “tax consultants” or salespeople that paid on a percentage of “what they are able to sell you.”
The tax consultant usually takes inbound calls from the internet, radio, and television.
Sometimes, the tax resolution consultant is transferred “leads” from a telemarketer (more about that later).
Federal Tax Lien Letters
If a federal tax lien has been filed by the Internal Revenue Service or a tax warrant by New York State ( tax lien depending where you live), dozens of tax resolution services companies will send you letters making claims of setting your back tax liability.
A federal or NY state tax lien, once filed, becomes a matter of public record.
There are mailing list companies that comply lists of individuals and businesses that owe money to the IRS of State.
These lists are bought by many tax resolution services companies.
How do I know?
Many taxpayers that I assist with tax problems at my tax law firm often come to the office with stacks of these letters making false promises.
Calls from Telemarketers
If the letters aren't bad enough, many of these companies have telemarketers that will harass you several times a day.
Once you tax lien is filed at the County Clerk's office, it is a matter of public records and you are on their radar.
It is their job to call you and transfer you to a “closer" (tax consultant, representative, etc.), who will sell you their services.
Both the opener and the closer and paid a commission based upon the amount of money you pay the tax relief company.
This is a true "boiler room" (high pressure sales floor) environment. You either "sell the lead" or you are fired.
If you own a business that owes back taxes, you will receive even more of these calls.
"Tax Consultants" Really?
The salespeople at tax resolution services companies are given titles such as “ tax consultant, representative, account representative,” etc.
Many of the salespeople have little to no training in representing taxpayers before the IRS.
Rather, many so called tax consultants are hired off the internet responding to job postings for “closers.”
If you ever watched movies like “ Boiler Room“ or The Wolf of Wall Street,” you get the idea of how many of these firms are run.
The tax consultant earns a commission between 10% to 30% of what he or she sells you.
They don’t care what they say to sign you up…it’s not as though they have a law license to lose.
8 Tax Resolution "Sales Pitches"
Here are some of the more common claims that you will hear and what the claims truly mean:
“We’re the most successful (largest) tax resolution services company”
What successful usually means is successful for the owner(s). What largest usually means is that they handle a lot of volume.
What that usually means for you is that a salesman will either talk or meet with you to sign you up; a low level clerk will handle the paperwork; and someone with authority will “rubber stamp” the case.
You should probably forget about any personal attention to your case.
“We have served over 5,000, 10,000, etc. clients”
That may mean something if you are a national hamburger fast food chain but not if you want personal attention to your very important tax problem.
I don’t think that you want to be another insignificant number in an “assembly line” tax firm. How important do you think your matter is to them?
“As seen on TV, CNBC, CNN, and ESPN…”
An advertisement or famous paid spokesperson does not make you credible.
Anyone can pay for an advertisement.
They want you to believe that these prominent news stations endorsed the company. Meanwhile, they just paid for an advertisement on the station.
You must do your due diligence.
“The new tax law will make it easier on you….”
They want you to believe that a miraculous new law has been passed that will make the IRS friendly and accept anything you offer them.
That’s their way of getting you to think that they can achieve great results.
While tax laws do change all the time, these claims are typically not true.
“We are tax settlement specialists.”
The bad news is that not everyone qualifies.
The good news is that every tax problem has a solution and there are several solutions available to protect your interests.
While an Offer in Compromise is an excellent option, it doesn’t fit every case.
Any strategy, or combination of strategies, if they don’t fit your case, can cause more harm than good, and cost you unnecessary expenses to boot.
Just as in medicine, the wrong prescription can make you even sicker.
There are many providers of services who will submit your Offer in Compromise forms. These cut-rate “Offer Experts” do little more than mail the forms that you prepare to the IRS.
Anyone can mail in an IRS form.
When you are paying a professional, you should get expert guidance, even if it’s not what you want to hear.
Not all of the available options are right for everyone.
Real professionals don’t use a “one-size-fits-all” approach to force a single solution on every case.
“ We have tax attorneys on staff.”
When you review a website of the tax resolution services firm, you should look to see if the tax attorney that will be handling your tax problem. is listed on the website.
If the tax attorney is not listed on their website, you should ask “why not?”
The reason why is because many tax firms subcontract the work out.
During your initial consultation, you should ask to either speak to or meet with the tax attorney that will be handling your tax problem case from beginning to end.
If they give you the run around, hang up the phone.
"We’ll be able to solve your tax problem for a fraction of the amount owed…”
That may be possible after a thorough analysis ….but every person’s situation is different.
The tax consultant wants you to believe that everyone falls into the same situation.
“We’ll be able to immediately tell you how much we can save you….”
This is usually a bait and switch.
If they are not doing a THOROUGH ANALYSIS, then how can they possible know what your situation is and which of the all the available options is best for you.
That’s like a doctor giving you a prognosis without even examining you.
If they can predict what the IRS will settle your case for, they should really be in the fortune telling business.