Protecting Yourself Against Tax Relief Scams

While tax season equates with big refunds for some Americans, others end up facing heavy tax debts. Unfortunately, failing to pay the total amount that you owe is likely to cost you significantly more money in terms of interest fees and penalties, while leaving you open to potential liens or even seizure of your property and financial accounts.

In an attempt to protect assets and resolve their IRS concerns, many people end up turning to tax relief companies. While these types of businesses often make big claims about lowering the total amount that you owe, scams are common and can end up leaving you in a bigger hole.

IRS Warnings About Tax Relief Companies

During the spring, it is common for advertisements to pop up in print, on radio, and in television commercials from individuals and companies offering tax relief services to those who owe the IRS money. The Federal Trade Commission (FTC) warns that these companies often charge thousands of dollars in upfront fees, in exchange for the promise of eliminating tax debt and avoiding collection actions through hardship programs offered by the IRS.

Unfortunately, the FTC reports that in too many of these cases, these companies fail to live up to their promises. Either the taxpayer does not qualify for the programs promoted, or the company involved is unable to reduce the debt, in some cases simply pocketing the money paid to them without even trying. The result is that the consumer ends up being out of the money they paid in fees while still owing the IRS and facing additional penalties and collection actions as the result of the time that was wasted. In complaints filed with the FTC, some victims claim that in addition to reneging on service, the companies involved took even more money from them, in the form of unauthorized bank or credit card charges.

Legitimate Ways To Resolve Tax Debts While Protecting Your Assets

If you owe back taxes, the Internal Revenue Service offers three ways of dealing with your debt:

• You can request additional time to pay through an Online Payment Agreement;
• You can pay through a credit card, allowing you to make payments at a potentially lower interest rate without accruing additional IRS penalties;
• You can request an installment plans through an IRS installment agreement.

In addition to the above, through the IRS Fresh Start program you may be to negotiate an Offer in Compromise (OIC), which is an amount less than what you currently owe. These are all programs offered directly through the IRS which do not require a tax relief company to act as a middleman on your behalf.

Our Experienced Asset Protection Attorneys Can Help You Today

If you have concerns about tax debts or how to shield your property and assets from potential collection actions, contact our experienced New York asset protection attorneys today. At Cavallo & Cavallo, you can trust us to provide the professional legal representation you need to ensure your rights and interests are protected, while advising you on the best course of action in your particular case. We are your neighborhood law firm, serving the Bronx, Westchester, and the surrounding areas. Call or contact us online to request a consultation

Resources:

irs.gov/uac/newsroom/irs-fresh-start-program-helps-taxpayers-who-owe-the-irs/

consumer.ftc.gov/articles/0137-tax-relief-companies