If you find yourself in the unenviable position of owing the Internal Revenue Service (IRS) taxes and are looking for help in paying or reducing the taxes owed, use caution before enlisting the help of a company that offers tax relief services. The IRS is sometimes willing to negotiate taxes owed through their Offer In Compromise (OIC) agreement. It is important for taxpayers to know that this is not a common practice and you must qualify under very specific circumstances to even be considered for this type of agreement. As a general rule the IRS does not extend the OIC to any individual who they believe can pay the liability in full or through a payment plan. Understanding these facts can help you avoid being scammed by a number of companies that offer services which are not legitimate and may result in you facing more financial problems in the future. The following tips can help you weed out the companies that are just interested in relieving you of your hard earned cash.
- Do you qualify for OIC– Liability settlement is a popular method of liability elimination, however dealing with the IRS and owed taxes is an entirely different ballgame. In order to be eligible for an OIC, you must meet certain criteria which you can learn more about by visiting the IRS website. If you feel you are eligible per their guidelines, then you can consider working with a company that offers tax settlement services. By educating yourself first before moving forward you can reduce the chances of being scammed by a company that is not forthcoming with all the facts regarding the process.
- Company offers guaranteed results without questioning your situation– Be on the lookout for companies that promise guaranteed results, fast without even bothering to ask you some basic questions. Does the tax lawyer or “expert” confirm why you owe the taxes? Do they question your ability to repay the taxes in a traditional method? If they are not asking you the right questions, but are instead pushing for an OIC without considering other options, they are more than likely not interested in resolving your problem with the IRS. In order to truly help you with your tax problems they must understand the background information. Secondly, no one is able to predict how the IRS will respond, therefore anyone promising fast results without even meeting the taxpayer to learn more, is selling results they can’t possibly predict.
- Confirm physical locations– Telephones, fax machines and email have made it possible for most business transactions to require little or no physical meetings. This makes it possible for “dummy” companies to scam people without ever meeting them face to face. A legitimate company will have a physical address whereas con artists will set up locations that do not exist or they will not disclose their address. If you can’t meet with the people who are helping you resolve your tax problems, they are probably not conducting legitimate business services.
- Amount of cash deposit required– Tax attorneys, like other attorneys generally require some sort of cash deposit before they begin working on your case. This in itself is not a sign of a scam, however honest attorneys will estimate how much your case will cost and determine a fair deposit amount based on that figure. If you have already discussed your case with a tax attorney and shared how much cash you have available to work with, and the deposit matches that amount….proceed with caution. In general, it is best to avoid companies with retainer fees (if possible) in order to limit your risk.
- Unresponsive or changing representatives– You are dealing with a serious financial problem and need to have the ability to communicate with the person handling your case on a regular basis. If you find you are often waiting for replies or are dealing with company representatives that are constantly changing, the chances your case is being handled with the care and focus necessary to be successful are slim.
When it comes down to it, you have to use a bit of common sense and follow your instincts when considering a tax settlement company or attorney. Research the company prior to exchanging information and if you see red flags that just don’t seem right, continue searching until you find a company or person who you feel is competent in representing your case.