Avoid Tax Relief Scams—How to Find Real Tax Relief

Few financial issues are as stressful as unpaid taxes. The IRS can seize your assets, revoke your passport, and leave you financially destitute. That’s why the tax relief industry has grown so rapidly over the last 30 to 40 years—promises to handle state and federal tax issues sell, whether or not a company can actually keep them. 

Unfortunately, while companies may promise to eliminate tax debt or settle it for pennies on the dollar, you can’t always trust what you see in advertising. There are legitimate tax relief companies out there, but you have to put in some research to find a firm that can deliver.

At Paladini Law, we’re a tax law firm, not a tax relief company, and we focus on providing our clients with high-quality, personalized tax law services. If you’re struggling with tax problems, we can help you find the best solution for your situation. To help you find the best tax relief possible, this post outlines how tax relief services work and how to find legitimate help and avoid scams in this industry. 

What Tax Relief Companies Do

Legitimate tax relief companies and tax law firms like Paladini Law can help taxpayers in many different ways. Some of the forms of assistance you can expect include:

• An explanation of your current tax situation: No matter how simple or complex your tax problems are, having a tax professional lay out just how serious your issues are and what it will take to clear them up is helpful.
• An explanation of the options that are (and are not) available to you: The IRS and state tax agencies have various forms of relief available for taxpayers, but each option has limitations. A tax professional can help you understand which options suit your goals by reviewing your finances and your tax situation.
• Assistance with the paperwork and documentation you need: Many tax relief programs require an extraordinary amount of paperwork and supporting documentation. Even with the explanations provided by the IRS, most taxpayers struggle to fill out this paperwork accurately. A tax attorney can ensure that these forms are filled out accurately and promptly, avoiding delays.
• Communication and negotiation with tax agencies on your behalf: Talking to the IRS is stressful at best. A trustworthy tax professional can take over communication and handle negotiations, streamlining the tax relief process.
• Solutions when you hit roadblocks: If you come across hurdles in your journey to tax compliance, it’s easy to get discouraged. We’ve navigated these challenges many times and can help find solutions that keep you moving toward your goal.
• Help moving forward: Once your current tax issues have been resolved, you’ll likely never want to worry about tax problems again. With our guidance, you can set yourself up for future compliance.

Limitations: What Tax Relief Companies Cannot Do

Some tax relief firms make promises they cannot keep to draw in customers. If a claim made by a tax relief company sounds too good to be true, it probably is. Here’s an overview of what we can’t do:

• Qualify you for programs you don’t qualify for: Many programs have extremely strict limitations, such as the offer in compromise program and the partial payment installment agreement. You may want to qualify for options that allow you to pay less than what you owe, but a tax relief company can’t change that if you do not qualify because of assets or income. 
• Guarantee any specific outcome: While experienced tax attorneys can reasonably outline the potential outcomes, tax law has no guarantees. Many are subject to what the IRS (or tax court) decides, as they have ultimate decision-making authority.
• Force the IRS to agree to an offer or solution: The IRS generally makes its decisions based on the totality of the circumstances. This means that they consider all available information when interpreting a taxpayer’s actions and deciding whether or not they qualify for different forms of relief. While a good tax professional can negotiate, they cannot make the IRS’s decisions for them.

Researching Tax Relief Companies

To protect your financial well-being, you shouldn’t rush the process of choosing a tax relief company. Choosing the first company you see in an ad or picking the company with the boldest promises can leave you frustrated and dissatisfied. 

Here are a few questions to remember as you explore different alternatives.

How Did You Find This Company?

Advertising on national television or other high-traffic areas is expensive—and a company that seems to be everywhere you turn when you look up tax relief is likely spending a sizable chunk of its revenue on advertising. This often means there’s less left to hire experienced and proven tax professionals. 

Rather than focusing on the companies with big advertising budgets, consider looking for a smaller, boutique tax relief firm. Ideally, you should find a tax pro via referrals, trusted reviews, local advertising, and thorough research.

Will an attorney handle my case?

Many tax relief companies tote tax attorneys on staff. Unfortunately, they don’t tell you they have 1 or 2 attorneys for thousands of clients, meaning the work is never actually reviewed by an attorney. At Paladini Law, every case has a responsible attorney assigned to it to ensure clients get the best result possible.

What Promises Do They Make?

Remember that there are no guaranteed outcomes when it comes to tax relief. If the person you speak with promises to settle your tax debt for pennies on the dollar or guarantees that you won’t have to pay anything, it’s time to slow down and think about what they’re saying. Are they just trying to get your business by any means necessary, or can they follow through on their promises?

How Aggressive Are They?

This is an incredibly important decision, and it’s not one you should be rushed into. If a company utilizes high-pressure sales tactics or claims that specific solutions will only be available if you sign up right now, they may not have your best interests in mind.

Where to Research Tax Relief Companies

There are lots of resources to help you find a tax relief company you can trust. You may want to start your search by looking at a company’s Google Business Profile. These listings provide information on a company’s location, services, and availability, and they also include reviews that companies cannot take down. 

The Better Business Bureau is another excellent resource. Look into how a company replies to ratings and complaints. Complaints are inevitable, but what matters is how a company responds and makes things right. Rather than looking into massive national tax relief firms, consider limiting your search to local companies that tell you exactly who you’ll be working with.

Signs of Tax Relief Scams

It’s important to note that tax relief scams may still offer some degree of service. It’s rare for them to take your money and run without doing anything. However, a scammy company is likely to choose the fastest solution that requires the least amount of work on their part, regardless of whether or not that’s the best solution for you. That’s what you have to watch out for. 

Companies that spend all their revenue on advertising have to bring in an enormous amount of clients to make up for that spending, which means churning through cases as quickly as possible. The goal is to find a company that prioritizes your needs and puts in the time needed to find a solution that suits you. These are some warning signs to watch out for:

• Unrealistic promises: The IRS has strict requirements for its programs, and outside tax professionals can’t guarantee any specific outcome. If they make promises before knowing much about your situation, they are likely just trying to close a sale.
• Vague language: Tax relief solutions are complex and nuanced. Suppose a company makes vague claims without any supporting information. In that case, they may not know enough to explain solutions properly or rely on general claims to draw in potential clients.
• Focusing on IRS tax issues without addressing state tax issues: Someone facing significant IRS tax issues is likely also struggling with state taxes. Addressing one without the other doesn’t bring true relief. For example, if you’re dealing with an IRS audit and a New Jersey tax audit, you need a tax attorney with dedicated experience with federal and state audits.
• Massive upfront fees: Tackling your tax problems is an investment, but it shouldn’t mean paying high fees upfront before receiving any assistance. A legitimate company should provide a breakdown of its fee structure.
• A reliance on quantity over quality: A company that boasts about how many cases they handle versus how well they handled those cases may approach tax relief like a manufacturing line—rather than tailoring solutions to each client, they just take on new case files, send them on to overworked tax professionals, and turn to their next sales target.
• Inclusion on pay-to-play lists: This is possible even when you use trustworthy news or finance sites to seek guidance. A surprising number of rankings are “pay-to-play”—this means that the companies listed paid for their spot. You deserve a company ranked high because it earns that ranking—not because it pays for it.
• Use of buzzwords: Terms like “one-time forgiveness” and “IRS Fresh Start program” get thrown around a lot by tax relief companies that bank on clients not knowing what they mean. Companies that promise relief via these programs without explaining what they do may be scams.

Check out our success stories page to get a sense of the process of working with our firm.

How to Avoid Rip-Off Tax Relief Services

You know how important it is to choose the right tax relief company, but how confident are you in your ability to avoid scammy services? Use these tips to guide your search:

• Avoid companies that cold-call or send unsolicited mailers. Companies that engage in cold-calling or mass mailers claiming you qualify for relief often rely on quantity over quality to make their money.
• Pass on aggressive sales tactics. If you set up a call with a company and they begin pressuring you to sign up immediately, end the call and look elsewhere. You deserve to make a decision when you’re ready, not when you’re forced into it.
• Do not sign up until you know what you are paying for. A legitimate company will be transparent about its charges and what you get for your money.

What to Look For in a Tax Relief Company

Finding a reliable tax relief firm will make you feel educated, empowered, and hopeful—not rushed and overwhelmed. They should be able to provide a clear breakdown of their services, what they charge, and when your tax problems may cost more or less to resolve. 

Additionally, during a consultation, they should ask specific questions about your taxes and overall financial situation. Getting more information on your needs and circumstances before making suggestions is a good sign that a company is legitimate. Limit your search to companies that assign cases to enrolled agents, CPAs, and tax attorneys.

Questions to Ask When Hiring Tax Relief Help

Asking the right questions can help you compare companies and feel confident about your choice. Start with these:

• Who will work on my case and what are their credentials?
• Who will I contact if I have questions?
• Does your firm address state and federal tax issues?
• How do you determine whether or not I qualify for specific types of relief?
• What are your fees, and what will happen if my case is more complex than expected?

Benefits of Choosing a Local Company

Local companies tend to be significantly smaller than national tax relief firms. They are more likely to employ a trusted set of tax professionals they have fully vetted, so your case will likely end up in qualified hands. Since they are local to your area, they may have more in-depth insight into state tax issues than national firms. Their personalized service and smaller staff usually mean that you know who’s handling your case, and you get to communicate directly with them.

Many forms of tax relief are available to taxpayers like you, but you may not find the best solution for your needs if you choose a scammy or unreliable firm. You wouldn’t buy a car or house without comparing prices, services, and offers, so don’t rush your choice of tax relief firm. Finding a company you trust may take some work, but with a little research and a few tough questions, you can get on the path to tax relief.

The team of tax attorneys at Paladini Law is committed to delivering personalized service to clients throughout New Jersey. Don’t let tax issues steal your peace. Call us at 201-381-4472 or reach out online to find out how we can help you.