THE TRUTH ABOUT TAX ATTORNEY ADVERTISING

You hear an ad for self-proclaimed experts for solving your tax problem on the TV or radio…so they must be legitimate, right?  Think again.  Outfits claiming to be able to solve your tax problems do not have to pass an ethics test or competency test to advertise on the TV or radio.  They just need money to advertise, and boy…do they advertise. In fact, this is where many scammers go to find their next victims.  State Attorney Generals have filed a wave of lawsuits to combat some of the big outfits you hear on late night television.  These state attorney generals have forced some of the big ones out of business (Roni Deutch, TaxMasters and JK Harris recently). Unfortunately, new tax dispute outfits abound (and flourish), where the old ones left off.

Times are tough right now, and the world is not scarce on so-called “professionals” eager to take advantage of people and capitalize on desperate times.  And that is the LAST thing you need…to be hammered into the ground by the IRS, and then let down by the very people to whom you paid what little money you had, and who is supposed to be on your side!  Hiring the WRONG outfit for your tax problems can only make your problems worse.

To prevent becoming a victim of these unscrupulous sales techniques, here are some things to keep in mind as you view tax help ads or direct communications from a tax help company:-

  1. They say they can save you pennies on the dollar!  What does this even mean, they can save you two pennies on the dollar…four pennies?  They are likely referring to an “Offer in Compromise.”  Saving pennies on the dollar is their sales pitch to get people to hire them.  What they don’t tell you is that the vast majority of Offers (like 95% of them, in fact) are rejected!  Furthermore, not everyone qualifies, and even if you do, you may have to put a significant portion of your offer down before the IRS will even consider it.  There are OTHER ways to reduce what you owe, that may have a better chance of approval!  It is best to hire a local, licensed professional to tell you what option is best for YOUR unique situation.

 

  1. A tax professional CANNOT legitimately tell you that you are an offer-in-compromise candidate without looking at your master tax file from the IRS.  So many pose as tax professionals, but really, they are just out-of-state salesmen who have never worked a tax problem case a day in their life!   Sure, they may get information from you over the phone such as income, assets, etc., but many of these outfits are just fishing to determine if you have an ability to pay…THEM!  The process of filing a successful OIC is an art form.  Don’t waste your money on one of these offer-mills.

Make note:  the ONLY way to determine if a person qualifies to pay less than they owe via an Offer In Compromise is to do a comprehensive financial analysis.  A true tax professional should first obtain your IRS master tax file, review income and assets, supporting documentation, and utilize mathematical formulas before even deciding if an OIC is the best option for you.  Only then can a true tax professional know:  1.  If a taxpayer even qualifies to file an offer 2.  What that offer amount will be….and these things take time and investigation.  There should be no definitive promises in the first call.

  1. Beware of outfits claiming to only employ “ex-IRS agents.”  While that may be true in some cases, beware…the term ex-IRS agent can be misleading.  A Revenue Officer is an individual who shows up at your door when you owe back taxes. You know, the unpopular guys Jesus dined with, to the chagrin of the Pharisees.  They are easy to spot. They wear collars and foam at the mouth. A Revenue Agent/Auditor, on the other hand, is a tax examiner, whose job is to apply tax laws to tax returns.  They are the nerds, the bean counters.  Unless you have a return being audited, an ex-IRS auditor may do you little good.  Conversely, a Revenue Officer may do you little good if you are being audited.  Tax returns and IRS collections are two separate departments of the IRS and though they are linked, they should not be confused as one and the same.  So, ask them about their credentials. 

 

  1. Their TV commercial depicts happy young customers standing in front of their huge house who settled their taxes for a fraction of what they owed.  This is misleading.  The general rule: if it seems too good to be true, it usually is, applies here.  Unless you are a huge family like the Von Trapps with 12 kids and you actually need all that space, don’t expect to settle for the loose change floating around in a McMansion.  Remember, when examining an Offer, the IRS diligently documents how you are living, and they are going to expect you to live modestly.

Don’t be another victim of these scammers.  Do your research before hiring anyone to represent you.  If you have any questions, or would like more free information about tax help advertising, call 1-800-721-7054 or call my office direct at 405-607-1192.

Travis Watkins
Senior Tax Attorney
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