Volume 17 Issue 6 --
Volume 17 Issue 6 -- November/December 2013
On various radio and television media, it is fairly common to hear tax collection businesses say something like the following: “If you owe money to the IRS, they can seize your pay -- BUT WE WON’T LET THAT HAPPEN!”
Despite the allure of such claims and promises by tax, they are often patently not true. Even worse, in our firm’s experience hiring companies that make such flamboyant promises often exacerbates the tax problems of those in tax trouble.
You may be asking why? The answer lies in the predatory motives of many of these companies which we call “Tax Buzzards.” They promise comprehensive tax relief, but know or should know that they will be unable to fulfill these grand promises in many situations.
The reason the client’s tax situation can get worse is that these companies are not oriented towards providing competent service and advice but toward collecting fees from those in tax trouble.
Remember the old bromide: “if it seems too good to be true” - - it probably is.”
Fortunately, we now have the Internet and search engines that can quickly provide information about companies which promise tax relief and do not perform. Many duped individuals have complained to the Attorneys General of their states and the respective Attorney Generals have acted by bringing class actions against such Tax Buzzard companies. Those who don’t or won’t use the internet should consider asking a relative or friend to investigate the reputation of companies promising “certain relief - - such as settling tax debts for pennies on the dollar.”
Perversely, those who fall for claims like, “WE WON’T LET THAT HAPPEN,” are the ones most likely to have, “IT HAPPEN TO THEM.” Once such errant companies have obtained the initial lump sum payment the all too common pattern is to neglect both the IRS and the delinquent taxpayer until the taxpayer-client is irritated, often financially exhausted, despondent, and resigned to think there is no available relief.
Upon reaching this state of despair delinquent taxpayers often give up and are then subject to IRS enforce collection action like bank levies (seizures) of bank accounts or assets like vehicles and business assets.
It is common for us to hear from people who have suffered such tax problems. Frequently we hear from individuals and businesses that are facing tax seizures, only to learn that the would-be client has previously been fleeced by one of these companies and now has no money to pay for additional assistance.
In all such cases those harmed should complain vigorously and persistently to agencies like the IRS, state tax officials and their Attorney General’s office.
If you are considering hiring a company to assist you with a tax dispute, here are a few red flags to look for:
· Were you asked to sign an IRS Power of Attorney, (POA) Form 2848 for both you and your spouse, if married? If yu were not asked to sign a POA, your alleged representative cannot deal with the IRS unless you are present or on the phone with them at the same time!
· Were you asked to pay a lump sum amount with the representations that such lump sum payment would be the total fee? No one can be certain, particularly when dealing with a prospective new client and the IRS that a particular favorable result can be obtained gained based on the time purchased through a lump sum payment.
· Were you promised two or three levels of “guaranteed” IRS review because the employees of the Tax Buzzard Company were former IRS agents?
· Were you asked to make monthly payments for an indefinite period with no ascertainable goal or objective?
· Are you receiving return calls and copies of pertinent analysis documents? One of hallmarks of a rip-off is the pattern of not responding to calls, e-mails or letters - - so you will become enraged and leave.
If you have a question about any of these companies, before you hire them you may want to contact Newland & Associates. It is likely we have heard of them and we can discuss what some of them have done to clients or failed to do with the IRS.
If you need help with tax matters, please contact Newland & Associates.
Published by the law firm of Newland & Associates, PLC
9835 Business Way
Manassas, VA 20110
Call us at (703) 330-0000 for a full range of business law and tax-related services.
While designed to be accurate, this publication is not intended to constitute the rendering of legal, accounting, or other professional services or to serve as a substitute for such services.
Redistribution or other commercial use of the material contained in Newland's Business Notes is expressly prohibited without the written permission of Newland & Associates, PLC.
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