If you owe back taxes, you may be tempted to turn to companies that claim they can reduce or eliminate your tax debts and stop back-tax collection by applying for IRS hardship programs. The truth is that most people don’t qualify for the programs these fraudsters hawk, their companies don’t settle the tax debt, and in many cases they don’t even send the necessary paperwork to the IRS.
The FTC recently settled a case against American Tax Relief, which bilked consumers out of more than $100 million by falsely claiming it could reduce their tax debts. Under the settlement, the scammers are banned from telemarketing and selling debt relief services, and must surrender more than $15 million in cash and assets to settle charges that they violated federal law.
If you’re having trouble meeting your tax obligation, here are a few tips:
Read your notices from the IRS or your state comptroller. Ask them about collection alternatives. The IRS has information online about the collection process and payment options, and videos on their YouTube channel. You also can contact the Taxpayer Advocate Service, an independent organization within the IRS that provides free help to people in financial difficulty or who need help resolving a problem with the IRS. Call 1-877-777-4778 or go online.
Ignore promises from any company that says you are “qualified” or “eligible” for a tax relief program to resolve your tax debt. Only the IRS or your state comptroller can make that determination.
Walk away if a company requires a fee in advance for tax relief services. Check them out with the IRS.