“There's no such thing as a free lunch” is a groan-inducing cliché, but lawyers have resorted to it surprisingly often when it comes to tax problems. The fact is, if a television ad seems too good to be true, and it promises to solve all of your tax and debt issues in a single stroke, then you should forget about it immediately and change the channel.
A good example is debt-consolidation firms which frequently advertise on afternoon and late-night TV. These companies promise to bundle your tax, mortgage, and/or credit card debt into a single reduced lump sum, which you would then pay off in monthly installments (usually to the company which does the bundling).
What makes these offers enticing? If you're facing $20,000 in accumulated debt, then paying it off in $500-per-month increments may seem like a good deal—and it spares you from having to write out separate checks to various creditors, or deal with their representatives on the phone. There's a major catch, though.
First, if the firm actually succeeds in reducing your debt, then the interest rate on your lump-sum debt will be astronomically high—you may be paying $500 per month for the rest of your life! (After all, why would they consolidate your debt and not expect anything in return?)
Second, it's hit-or-miss whether these firms actually can rope all your creditors together and get them to agree to reduce their bills. IRS revenue officers, for example, usually are unimpressed by debt-consolidation agencies, and often will strike better terms with an Oklahoma tax attorney who actually knows what he's talking about.
Questions? Contact the Oklahoma tax professionals at Travis W. Watkins, PC (800-721-7054) for a free consultation today!