Over the years, I have had clients retain me after they had already paid for the services of a tax resolution company. The most common complaint I hear is that the tax resolution company charged the client for taking on the case but never did any work leaving the client in a worse situation than when they started.
Typically, my clients were charged thousands of dollars for simple matters but were often told the case was too complex or taking too much time and were either asked to fork over more money or their case was going to be dropped. In the meantime, no work, or very little work, was done on the client’s behalf. The result being no result.
Much to my chagrin, this is still happening. A recent client told me that they retained the services of a tax resolution company out of Chicago, paid them a few thousand dollars, only to be told that they were dropping the case because it was too complex. Thank you very little tax resolution company.
An experienced tax practitioner would have known it was a complex case just by looking at the paperwork from the client. Maybe this tax resolution company did and chose to pick up some quick money knowing they were not going to do the case anyway. I am speculating here because I don’t know the mind of the tax professional at that company.
Did my client ask for a refund? Yes. Was my client given a refund? No.
Instead, my client was given some lame-o excuse why he wasn’t getting his money back. No refund, no satisfaction.
In another recent example, a different client of mine received a solicitation in the mail that he thought was another IRS lien. He was frantic. I reviewed it for him and told him it was just an ad and that I had it under control. I was immediately thinking that it was an unduly influencing or coercive ad my client received.
After reviewing the ad, I couldn’t help myself but to call the company and see what they were about. I called and talked with a tax resolution salesman who went through what he could do for me and how his tax resolution company could settle my IRS debt for pennies on the dollar blah blah blah. Completely illegal approach he was using. They are located in Los Angeles CA.
One of the things he told me was that his company had attorneys on staff. I asked him if I could talk to one and he said no. When I asked him for one of the attorneys name and if he could have one of them could call me back to discuss my case, he still said no. He said he needs to qualify me first. But Mr. Hot Shot Tax Resolution Salesman wouldn’t confirm with me if he was qualified to qualify me. It was a Catch 22.
This leads me to believe they have no attorneys on staff. This is against IRS regulation on a number of points and also qualifies as deceptive business practices.
Mr. Hot Shot Tax Resolution Salesman and I continued to talk. I wanted to hear more of what he had to say. He was persistent in wanting my confidential and personal information so that he could “analyze my case and see if he can help me”. But before I was going to give this golden information over to him, I wanted to know what his qualifications were for analyzing my IRS case. I guess after much frustration with my non-compliance, he finally told me he was a CPA. But when I asked him for his CPA license number so I could verify his credentials, he wouldn’t give it to me. Which leads me to believe he was not a CPA.
According to IRS Circular 230 and IRS Rev. Proc. 81-38, you need to be an attorney, a CPA or an enrolled agent to discuss a taxpayer’s case. Anyone else is not qualified to do so and is acting illegally.
The company I called, which I will not name, now has me on their auto dialer and I receive at least two calls a day from them. A couple of times I hit the number 1 to be connected to a live “tax professional”. What I got was another unqualified hot shot tax resolution salesman trying to separate me from my money.
I am not here to disparage all tax resolution companies. There are some that are good and honest. But, it seems to me, that the norm is the opposite. That the more aggressive tax resolution companies have the intent to ravage the client and fleece them of as much money as possible instead of actually digging into the client’s case and acting as their zealous advocate.
I hope this isn’t a sign of things to come or a repeat of the past. Its this type of action that made the FTC and IRS clamp down on tax resolution businesses in 2012. It seems as though some people are not following the rules.