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How to Avoid IRS Debt Relief Scams

May 10th

How would you like to be able to lower or eliminate your tax debt payments – guaranteed? For those Americans struggling to pay back IRS debt, this offer is mighty appealing. As the IRS continues increasing enforcement, more and more companies across the country are claiming they can help you reach a tax resolution. But beware! Con artists who only want to steal your money and your personal information run many of these companies offering tax debt relief solutions! To avoid losing hard earned money and compromising identity, taxpayers must be careful when selecting IRS debt relief programs.

How to Find Legitimate Tax Debt Solutions

Whether you decide to trust a tax debt lawyer or work with an IRS debt relief program, keeping these tips in mind will ensure that you’re working with a legitimate organization. By proactively protecting yourself, you’re more likely to avoid tax debt scams and pay back what you owe without further headache. To avoid IRS debt relief scams:

Be cautious of tax firms that exaggerate their success rate. With the internet, it’s easier than ever for tax firms to overstate their qualifications or even the success rate that they’ve had with previous clients. How can you tell if a tax firm isn’t telling the truth about their qualifications? Simple: be sure to always seek help from a Certified Tax Resolution Specialist firm. These agencies put prospective clients through a series of tests to determine whether they even qualify for an IRS tax settlement. Many scams will accept all clients even if they don’t qualify.
Know what questions to ask. Ask how long the firm and tax attorney have been in practice and working to resolve IRS debt. Feel free to ask how many attorneys are on staff as well as the firm’s success rate with their IRS debt cases. One of the key questions is asking whether or not they have a guarantee. Since tax debt deals with a 3rd party – the IRS – results can never be guaranteed, so run away as quickly as you can from a source that guarantees IRS debt solutions.
Hire a firm that works for you. Certified Tax Resolution Specialists should work on a plan that fits your tax debt case, not try to make you go a certain route. Furthermore, ensure they’re responsive to your communication.


IRS Fights Identity Theft and Fraud

March 14th

Tax season isn’t only stressful for the taxpayer or those who may have unpaid taxes. The IRS is also working over time during the first quarter of every year trying to better protect consumers. Tax time is prime time for scam artists looking to commit refund fraud and identity theft, two areas of major concern for the IRS.

Fighting Back

Since the beginning of this year, the IRS has been involved in a massive investigation of fraudulent tax services and scams across 23 states. So far the IRS has been successful in catching and prosecuting criminals, leading to 939 criminal charges. What does this mean for the taxpayer?

While the IRS is taking an active role, taxpayers should still be cautious when filing their taxes.Identity theft is rampant and anyone using third party tax preparation companies should take caution to ensure the company is legitimate and licensed. Taxpayers are warned against using any company that requires bank information or direct access to such funds as a method of dispersing tax refund checks.Further, run of the mill check cashing places should be avoided when accessing tax refund funds. Always take the check to a FDIC insured bank to have the check cashed. The IRS also wants consumers to know they never solicit personal or bank information over the phone or by email, and any such actions should be reported immediately.



Tax Fraud Warnings

January 25th

Tax time is no doubt one of the most stressful times of year for most of us. Between itemized deductions, multiple W-2s and the threat of owing the IRS money, many Americans seek the help of qualified tax professional to help. However, tax time is prime time for tax scams that can quickly victimize the unsuspecting taxpayer.

The Warning Signs

Tax debt is serious business and while the IRS is committed to collecting on what is owed, taxpayers should be warned that owing the IRS money isn’t half a serious as committing tax fraud.  Before getting sucked into a scam, watch out for these warning signs of a potential scam:

  • Unlicensed employees, staff that are not a certified public accountants or tax lawyers.
  • Requiring payment for their services up front or do not offer money back guarantees.
  • Request direct access to your bank accounts or offer to pay tax debts on your behalf.
  • Failure to offer tax audit protection or guarantees.
  • Recommend ignoring the IRS or avoiding communication with tax officials.









Senator Introduces Bill to Prevent Prisoners from Collecting Tax Refunds

August 16th

United States Senator Mark Pryor recently introduced legislation to prevent prison inmates from collecting tax refunds. It has become an increasingly common practice for prison inmates to fraudulently collect undue tax refunds.

At present, the IRS pays out millions of dollars in refunds every year to inmates, despite the tax code explicitly prohibiting prisoners from receiving tax credits.

According to a 2010 Treasury report, prisoners filed more than 54,000 false tax returns in 2009 alone, totalling over $39 million in mistakenly paid refunds. Though most fraudulent returns are caught, these figures demonstrate the continued costly nature of these scams.

Most commonly, prisoners will search the internet for listings of businesses that have filed for bankruptcy. Listing a defunct company as an employer on a false tax return form makes it especially difficult for the IRS to verify the claim.

Tax Fraud Prevention Act

Senator Pryor’s Tax Fraud Prevention Act improves information-sharing between the Internal Revenue Service and the Federal Bureau of Prisons and State prison authorities, to aid in the prevention of tax fraud.

This act will ensure that the taxpayer identification numbers belonging to prison inmates are routinely cross-referenced with Federal tax returns before a refund is issued. In addition, the IRS will provide the prison authorities with a list of inmates that have previously tried to defraud the government. This will make it possible for states to take more effective legal action against such prisoners.

Lastly, the legislation makes permanent the authority of the IRS to share certain tax return information with prison officials. This power would otherwise expire at the end of 2011.

Senator Pryor estimates that through the prevention of fraudulent tax refunds, this legislation will save taxpayers $134 million over the next ten years.


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