Consumer Alert

Watch Out for Tax Debt Relief Scams

Some companies and law firms use false promises and deceptive tactics to take advantage of consumers who desperately need help resolving their back tax debt to the IRS. These companies usually charge a high upfront fee, possibly thousands of dollars, for their services. They tell consumers that they can stop IRS collection activity and resolve IRS problems. After collecting their advance fee, these companies often fail to provide the promised tax relief. Instead, after requesting the same documents time and time again from consumers, they conclude that the consumers no longer qualify, or the IRS rejects their efforts to resolve the back tax debt. Some companies never even submit a request to the IRS to resolve the debt. And in the end, these companies typically refuse to refund the advance fee consumers paid them.

Don't be lured in by promises that sound too good to be true. Here are some tips from the IRS for avoiding tax debt relief scams:

First, try to resolve your problem directly with the IRS. Call the number on your IRS notice and ask about collection alternatives. You may be eligible for a monthly payment plan, or you may be able to pay less than the amount you owe.
Don't ignore the notices the IRS sends you. The problem won't go away.
Don't trust a company's claim that you have "qualified" or are "eligible" for an IRS program to resolve your back tax debt. Only the IRS can make that determination.
Be cautious about services that ask for payment in advance.

If you can't resolve your problem with the IRS, you have options to resolve your issues for free:

You can seek help from a Low Income Taxpayer Clinic (LITC). To see if you qualify for help, go to IRS's Taxpayer Advocate Service page and click on "Low Income Tax Clinics." The site includes a list of clinics in your area.
You can contact the IRS's Taxpayer Advocate Service (TAS). TAS employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. You can reach TAS at 1-877-777-4778 or TTY/TDD 1-800-829-4059.

The IRS Office of Professional Responsibility has jurisdiction over Enrolled Agents, Attorneys, Certified Public Accountants, Enrolled Actuaries, and Appraisers who practice before the service. If you suspect practitioner misconduct, you can report the behavior to the IRS via e-mail at opr@irs.gov.

If you are a victim of a tax debt relief scam, file a complaint with the Alaska Attorney General's Office.

Consumer Protection Unit
August 2010