When it comes to something as important as resolving your
tax liabilities, it is important to conduct research on the
tax resolution firm(s) you are considering before agreeing
to purchase their services.
What sort of things should somebody do as part of conducting
their “due diligence”?
First of all, visit the Better Business Bureau at www.bbb.com
and look for any complaints or outstanding issues that they
have with clients.
Second, you may actually want to turn to an unlikely source
for information on certain companies: Your IRS Revenue Officer.
Revenue Officers will not provide an unbiased opinion, of course,
and many of them will even tell you not to secure representation
(which is a violation of IRS policies for them to say, but they
still do it). However, your RO has probably worked with most
of the large, national tax resolution firms and can give you
their personal opinion on the firm if you ask.
Third, before signing a contract for taxpayer representation,
be sure to confirm that the firm that will provide your
representation will assign your case to a licensed representative.
You should be guaranteed that your representative is a licensed
attorney, licensed certified public, accountant, or a licensed
Enrolled Agent, before you sign any contract. The IRS will not
allow non-licensed representatives to negotiate for a taxpayer,
but you would be surprised at how often large firms have unlicensed
assistants doing the actual IRS negotiation.
Fourth, be sure to ask if the individual selling you the tax
resolution service if they have ever been involved in actual IRS
or state tax negotiations. Many times you will get a delayed
answer because that answer is “no.” Be weary of salespersons
that will base how they can help you from a sales script. Any
case-experienced salesperson should be able to walk you
through the case proceedings from start to finish.
Understand that hiring a representative to negotiate on your behalf
is not a guarantee that your case will be resolved. You will need
to work closely with your representative to ensure that your best
interests are always held in high regard. Although your
representative should do nearly all of the interaction with the
taxing authorities, your participation with your representative is
vital to the resolution process.
You will want to confirm that the fee you are paying for the
service you are purchasing is a flat fee. If you cannot get this
guarantee in writing, it is not a flat fee. Many salespersons will
state flat fee over the phone but will not guarantee this in
writing. If you do not understand the terms and conditions of your
representative’s contract, you may be trapped into receiving
unexpected requests for additional fees. For detailed information
on this heinous industry practice, read my “tell all” report here:
It is very important for you to keep in mind that most of the
time when you are speaking with a tax resolution firm, you are
speaking to a commissioned sales rep on the phone. These sales
reps usually have zero actual tax experience, and much of what
they tell you may have been passed to them from OTHER untrained
personnel. This is important to understand because it is not
uncommon for these salespeople to give blatantly incorrect
information to people simply so they can close a sale.
Armed with these tips, you should be better positioned to make
a wise decision regarding hiring professional tax services.