How To Really Find a Tax Resolution Company You Can Trust
There are certain factors that businesses and individuals need to consider and review before hiring a tax resolution or tax debt relief company. Sadly, the industry has some bad apples who do not do right by the client. Companies have gone to great lengths to hide their mishaps by creating fake reviews online, creating multiple websites, closing and opening new companies, and by hindering the actual volume of complaints by tying refunds to release of liability agreements. Moreover, some companies have even changed their name in an attempt to bury the mistakes they made in the past. So how do you avoid being ripped off or having your tax problems mishandled by a tax resolution company?
Read the contract! Read the contract! Yes, the whole contract including the small print. The contract may be called the “Tax Agreement,” ” Tax Servicing Agreement,” “Client Services Agreement,” or “Client Services Contract.” Basically, it is the document you would sign in order to hire a tax company to start working on your tax debt problems. So what should you be looking for in a contract to determine whether to work with a particular company?
What Shouldn’t Be the Only Thing You Consider With a Tax Resolution Firm
- BBB Ratings – BBB ratings are key performance factor, but realize that they are not the end all. Every Better Business Bureau operates independently with a council that overlooks all bureaus. This means that you cannot assume that an “A” rating from one BBB location would be the same using another BBB’s grading standards.
- How Long They Have Been In Business – There are many companies that will paint the picture that because they have been in business longer they are better than another company. Length of time in business, while an important metric, shouldn’t be the only thing you consider either. Length of time in business can sometimes hide serious problems. JK Harris was founded in 1997 and filed for bankruptcy in 2011 after many customer complaints. TaxMasters was founded in 2001, and filed for bankruptcy in 2012. Roni Deutch started her law firm in 1991, but closed it in 2011 and she gave up her law license. We have even seen companies purchase companies with a great BBB rating or reputation as well.
Red Flags in a Tax Resolution Company’s Contract or Servicing Agreement
- Refund Policy with a Release of Liability Attached – Beware. Be cautious if you see any terminology or verbiage in the contract or agreement that states a refund will be given upon the completion of a “release of liability form,” or a “release of liability waiver.” Basically, the company is trying to protect itself for mistakes it may make with your case and will only give you a refund if you release liability or claims against it. This is its attempt to inhibit bad reviews online. The real question is whether you would want to work with a tax professional or firm that says, “I will give you back part of your money, but you have to sign this form that says you can’t publicly complain about us in any way and/or for any wrongdoing.”
- Refund Policy That Is Limited – Will you get a refund of 100% of what you paid, 75% of what you paid, or less? What are the number of days that must pass before you are not entitled to a refund? Does the number of days for you to request a refund coincide with their servicing process in case they fail to perform? Pay attention to the refund policy of any company with which you do business. Read the contract and pay close attention to the timeframe in which the refund has to be requested and to what has to be completed in order to get a refund.
So What Are the Most Important Factors to Consider?
- The Contract – No matter what a sales representative or person says to you, and no matter how much a company tries to deceive, the agreement details the terms of service. The contract dictates the terms of service for the company and customer. Therefore, if a company tells you they will give you 100% of your money back but it is not stated in their contract, don’t believe it.
- Review Websites – Websites like pissedconsumer.com, ripoffreport.com, complaintsboard.com and others have reviews from unhappy customers. ALWAYS search and read the reviews of any company you are looking to work with. Remember, no company is going to stop all complaints, and no service is perfect. Mistakes happen. However, be sure to read the complaints in detail as to what was done once a mistake was made or a customer had a bad experience. Did the company respond? Did the response seem adequate?
- Tax Professional Working Your Case – Do you know the attorneys, EAs, or CPAs who will be working on your case? Generally, the tax professionals on your case will be listed on IRS form 2848, Power of Attorney and Declaration of Representative (aka as a POA). If it is a state matter, it will be listed on that state’s POA. Once you find out the name of the ACTUAL professional that will be working on your case, what do their credentials look like? Can you find the credentials of the professional on the company’s website?
- What They Tell You – If something sounds to good to be true, it generally is. No one can promise you that you will qualify for a tax settlement without assessing your financial situation and transcripts. Lastly, no company is friends with the IRS or State taxation authorities whereby their relationship means they can bend the rules. Every tax company must abide by the tax code, and no one is above the law because they have a “relationship” or because they previously worked at the IRS or a particular State tax agency.
- Avoid Large Upfront Fees: Many companies will charge large upfront fees to get their case started. In our belief, someone should not be charged a full fee to work their case until the client and the tax attorneys assigned understand exactly what has to be completed in order to get back into compliance and obtain the best resolution.