The Industry Problem
Taxpayers owing the IRS are vulnerable. Fear makes people susceptible to companies promising quick solutions at premium prices. The FTC and state AGs have taken enforcement action against numerous firms for collecting large upfront fees without performing work, guaranteeing impossible results, missing IRS deadlines, and misrepresenting staff qualifications.
Red Flags
Guaranteed specific outcomes (no one can guarantee the IRS will accept "pennies on the dollar"). Large non-refundable upfront fees ($5,000-$15,000 before any work). Aggressive high-pressure sales tactics with artificial urgency. Emotional manipulation. Any of these should trigger caution.
What Legitimate Help Looks Like
Thorough analysis before recommendations. IRS transcript review and financial analysis. Upfront fee disclosure with written engagement letter. Realistic expectations about timelines and outcomes. Only attorneys, CPAs, and Enrolled Agents can represent before the IRS. Verify credentials through licensing authorities.
Protecting Yourself
Check BBB, bar associations, and boards of accountancy. Ask for references. Get a written engagement letter specifying services, fees, and refund policy. Do not sign under pressure. Do not pay large upfront fees until credentials and reputation are verified.
If a tax resolution company's promises sound too good to be true, they are. Legitimate tax resolution is methodical, transparent, and grounded in law and procedure.