Most American taxpayers take outside help in resolving their tax issues. Tax relief scams therefore is big business. Although most tax resolution companies and tax professionals are honest, there are some that run tax scams behind the mask of tax relief services. Therefore, taxpayers need to make sure that they stay protected from fraudulent businesses.
Tax Relief Scams & BBB rating
A good way to stay safe from tax relief scams is to check the BBB (Better Business Bureau) ratings of tax resolution companies you have shortlisted for help. Along with the rating that BBB gives to businesses, they also include details of court cases (if any), the number of consumer complaints filed against the business, overall complaint history and more to help taxpayers make an informed decision.
BBB ratings are based on 16 factors including a business’ complaint history with the BBB, type of business, time in business, and licensing and government actions known to BBB. Taxpayers can check the BBB rating of a business to know its background and current status in terms of honesty and competence.
Tax Relief Scams: Large Upfront Payment & Hidden Fee
All fraudulent tax services will try to extract money from taxpayers before providing any service. An express way of determining the intentions of a tax service is to find out whether the service takes a large upfront payment or not. Most honest tax resolution services charge a minimum upfront fee ranging from $3,000 to $4,000 whereas fraudulent tax services may charge as much as $15,000 to $35,000 and more as upfront fee.
Apart from large upfront fee, fraudulent tax services also have hidden fee that they do not inform taxpayers about. Any tax service that charges a large upfront fee may also be charging hidden fee.
It is in the best interest of taxpayers to research the tax service they are considering to hire to stay protected from tax relief scams. Taxpayers would benefit from looking at the tax companies we have reviewed to decide on which tax service to use to resolve their tax issue.