Know the warning signs:
You only speak with salespeople
A classic tax relief scam strategy is to keep you one degree away from interacting with any tax relief experts, meaning the only point of contact you have is someone on their “sales” team. Their job is to collect basic info and determine how much you owe, then they work hard at convincing you they can drastically reduce your debt. The bottom line is that it’s a sham, and they aren’t planning on doing anything of value for you.
They’re often pushy and very focused on collecting your payment information so they can “get the ball rolling.” Real tax relief companies might have a customer service team that handles questions and concerns, but you should still be able to reach one of their tax relief experts for specific questions. Speaking of specific questions—your questions about their services and abilities shouldn’t scare them away! It’s a red flag if they seem lost when you ask basic questions about strategies and results.
They require non-refundable payments upfront
This scam sign doesn’t only apply to tax relief companies, but any business in any industry. If they’re giving you the go-around and seem to be focused only on getting your money, you should be on high alert. Often, these tax relief predators will demand that you pay them before they do any actual work, which is every bit as ludicrous as it sounds.
They may even attempt to prey on your fears by telling you they know what the IRS knows, leading you to believe the situation is much worse than you think. These scammers love to force you into paying by driving you into a panic. Don’t fall for it!
They promise drastic results
Let’s be clear: tax relief services are meant to help you—and they can—but the reality is that your positive outcomes aren’t likely to happen overnight. If a tax relief company is promising to make all your concerns and problems go away in a very short amount of time, ask about their process.
Often, scammers will make these claims in order to get your money, then they’ll string you along for weeks and months without doing anything to help you. As with most other things in life, if an offer sounds too good to be true, it probably is.
They claim they can get results for “pennies on the dollar”
Most likely, they’re getting at the real-life possibility of an offer in compromise (OIC), which is an agreement between a taxpayer and the IRS that settles your tax liabilities for less than what is owed. The truth is that few people actually qualify for an OIC—only about 1 in 4.
The only way this could be possible is through thorough investigation into your situation; the IRS won’t grant an OIC for those who are able to pay their full tax liabilities, so if a company is making you this promise before they ask thoughtful, detailed questions about your situation, it’s probably a scam.
They don’t ask questions about your situation
It can be hard to talk about your own mistakes and faults, but it’s very important to lay everything out as honestly as possible so that you can determine the best path forward.
Your tax relief specialist will ask you pointed questions about what got you into your current situation, your financial habits, your income, your job, etc. They’re unable to do their job well and to get you the best solution if they don’t have all the facts. Don’t trust anyone who wants to promise you results before they do their research.
They employ delaying tactics
Your tax relief professional should be exactly that: a professional. They should come across as organized with little effort, and you should feel capable of trusting them with sensitive information and documents.
Some fraudsters in the tax relief scam game will repeatedly delay any progress because they don’t have intentions of actually starting on your case. Examples include:
- Asking for the same document multiple times
- Rescheduling appointments
- Taking too long to respond to normal contact methods like email and phone calls
- Providing the same excuse for why they don’t have progress to show
Their website seems funny
Go with your gut here, but there are some telltale signs of a bogus website that you can look out for. The first is a website that constantly asks for your personal information, including credit card or payment info. More than likely, you won’t be making a payment on a tax relief company’s website without speaking to a tax relief expert first, so being prompted to enter it right off of the bat is alarming.
Related to your personal and payment information is a URL that doesn’t begin with “https://”—the “s” at the end of “http” might seem like a small thing, but it’s important. It stands for “secure,” and companies pay to include it in their URL. This means that your data is encrypted or coded so it’s more difficult to steal. However, it’s not a total failsafe, as hackers have still been able to infiltrate https:// sites.
Finally, proceed with caution on any website that asks for your Social Security Number without any promise of protecting or encrypting it. Identity theft is the last thing you want to deal with if you’re also trying to pay back the government!