Dec 30, 2008

Tax Resolution Companies- watch out for them....

You hear it on late night TV, early in the AM while you getting ready for work, and in the mail (or spammed e-mail!)- these tax resolution companies that are offering "pennies on the dollar" or to "settle" your tax debt. Caveat emptor.

Resolving your tax debt is a complex matter. These deceptive companies are trying to sell you an "Offer in Compromise." Offers involve a complex set of facts and analysis: from looking at what caused the liability to a detailed analysis of your past, present and future assets and income. This requires a tax professional who has some experience in what will and will not work.

These companies are now starting to come under fire. CNBC is on to them and reporting about their longshot deception. CNBC reports that these firms currently constitute the biggest tax fraud scam in the U.S. The popular radio consumer advocate, Clark Howard, warns everyone about these companies.

Still you see them pedaling their deception in web press releases designed to increase their legitamacy. Also, they have web sites littered with "testimonials" about people who have been successful in utilizing their company to reduce their debt.

Believe me, the chances of a "settlement" are very remote. Also, they may not be the best resolution option. The lure of getting rid of your liability and a deceptive person on the end of a phone/in person conversation persuade you that there is hope. There is hope- just not the kind that these companies are offering. The hope is the realistic solution to resolve your debt. The IRS operates in a business type manner as a collection agency- this means that they can work with you if you know and understand the rules. These companies pedal fear of the IRS and opportunity for a "free lunch."

The truth is this:

1. Your tax debt is a serious matter that needs to be resolved
2. Living your life "out of the system" does not cleanse the conscience
3. Looking over your shoulder is not a way to live- the truth will set you free
4. The IRS is a Collection Agency with great collection powers
5. You have options- you just need to know them and what to expect

The tax "resolution" companies will highlight #1 above with "fear" and offer you deceptive ways around #2 - #5. Don't fall for it. Caveat emptor.

1 responses:

Anonymous,  January 1, 2009 at 11:18 PM  

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