As we approach the April 15th deadline for filing income taxes, it is a good time to look at a scam involving a company that fraudulently promised to reduce the tax debts of many Americans.  In my February 11, 2013 Scam of the day, I told you about American Tax Relief LLC.   In 2013 the FTC announced that it had come to a settlement with the  American Tax Relief company in regard to charges that the company had stolen more than a hundred million dollars from frightened taxpayers who had turned to them to help them reduce or eliminate their income tax debts.  You may have heard or seen American Tax Relief’s advertisements in which they promised to be able to settle tax debts for pennies on the dollar, stop wage garnishments and stop property seizures.  American Tax Relief misled consumers into believing that the IRS’ Offer in Compromise program by which taxpayers are permitted to settle their tax debts for less than what they owe is easy to achieve when, according to IRS figures, only about 30% of people applying for this program achieve any level of reduction of tax debt.  If you haven’t heard or seen these advertisements of American Tax Relief, you certainly have seen or heard them from other companies.  Unfortunately, many, if not most of these companies are phony.  You end up paying large up front costs and get little relief.   Now the FTC is sending refund checks to 18,571 of the victims of American Tax Relief totaling more than 16 million dollars.  If you were a victim of American Tax Relief and have not received a check,  you can use this link for more information about the refund program of the FTC.  https://www.ftc.gov/enforcement/cases-proceedings/refunds?utm_source=govdelivery  This link also provides information about the FTC’s refund programs involved with other FTC cases against such companies as L’Occitane, AdvaCal, and Lean Spa.

TIPS

Just because you have seen advertising in legitimate media does not mean that the companies advertising are legitimate.    If you owe income taxes, the IRS has programs to assist you including the Installment Agreement Program by which you may be able to make payments on your tax debt over time.  In some limited circumstances the Offer in Compromise Program may be available to you, but you are best off utilizing a CPA or a lawyer in negotiating with the IRS over any offer in compromise.   The IRS also has a Taxpayer Advocate Service which you can reach at irs.gov/advocate or by phone at 1-877-777-4778.  I urge you to be particularly wary of companies that claim that they can reduce or eliminate your tax debts.  Check them out with the IRS and the FTC before considering using their services.  Frankly, you would be much better off with the assistance of a knowledgeable tax lawyer or CPA.