Understanding IRS Tax Debt Relief - Smb Suggestions

Understanding IRS Tax Debt Relief

Tax time is often a stress-filled time of the year for many, particularly taxpayers who have to pay money into the government. Many taxpayers turn to tax relief services for a helping hand. Are they legitimate or just a scam? Learn more about tax relief services, how to spot tax relief scams, and what to do if you’re a victim of a scam.

What Are Tax Relief Services?

Tax relief services specialize in helping you if you have tax problems or owe money on your taxes. They may be certified public accountants (CPAs), attorneys, or enrolled agents, professionals who represent taxpayers when they meet with the IRS or have to appear at a tax-related hearing. These professionals typically work with legitimate tax relief agencies.

There are many tax relief service providers who aren’t legitimate and should be avoided. These groups often require the taxpayer to pay a large sum of money upfront with the promise that the tax payer’s tax liability will be eliminated or drastically reduced. Every year the Federal Trade Commission gets many complaints from taxpayers who have fallen prey to tax relief scams.

What Type of Services Will They Offer?

Tax relief service providers and tax settlement companies may offer to reduce the amount of debt you owe to the IRS or eliminate it altogether. They may also offer to stop property seizures, levies, or any wage garnishments that may be in the works. Often the tax payers end up paying almost as much in fees to these companies as they would have had to pay the government, but sometimes tax relief services can really save you money.

How to Spot Tax Relief Scams

As careful as we may all try to be in avoiding scams and unscrupulous businesses, even the most diligent tax payers sometimes fall prey to scams. How do you know what’s legit and what’s a scam? Here are some red flags to look out for:

  • Large fees required upfront
  • High-pressure sales tactics
  • They guarantee results
  • Consultations are done online or over the phone (rather than in person)
  • Minimum details are provided at “free consultation” until you pay a fee.
  • Ask that customers pay fees through prepaid debit cards or wire transfers

What to Do If You’re a Victim of a Scam

If you feel or know you’ve become a victim of a tax relief scam, you may feel helpless. While you’re probably afraid that you’ve lost your hard-earned money for good, there are some steps you can take. First, contact your local law enforcement agency and report the scam. If funds have been taken out of your debit or credit card company, you’ll want to report it to the credit card company as soon as possible so they can stop the transfer or cancel the card.

The next step is to file a complaint with the Federal Trade Commission or the IRS. You’ll have to contact the IRS anyway to pay your taxes. Almost any deal the tax relief services may offer you may also be available directly from the IRS, but without the high fees.

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