If you are in tax debt and are looking for a way to reduce the burden, a professional tax attorney can help you. But hiring a tax relief service is not as easy as it looks. It is a very crucial decision and you should take every care to ensure you choose the right one providing legitimate services.
Here are a few tips that can help you easily weed out the scam artists. In this article, we will be discussing how you can evaluate and hire a legitimate and competent tax attorney for helping you fix your tax issues. Remember, this is an important decision that will affect the next 10 years of your life, financially and emotionally. So, read the below-mentioned tips very carefully and then make the right decision.
Tips To Choose The Right Tax Attorney Services
1. The Offer in Compromise (OIC)
Tax attorneys who make promises of erasing your liability, reducing the owed amount, and guaranteeing a settlement through OIC must be avoided. You need a lot of tax compared to your income and assets before you can even make an offer. The IRS is very strict about this policy and doesn’t give out OIC easily. So, don't fall into the trap of false promises and hire one who sounds genuine and has a proven track record.
2. Penalties and Interest
If an attorney is telling you that as soon as you hire him, your interest and penalties will stop, you have to walk the other way. Your interest will continue to accrue as long as there's debt. Penalties are imposed when you fail to pay or file your taxes. You cannot just hire a tax relief service and expect all your penalties to go away.
3. Licensed professionals
All legitimate tax attorney services are required to have licensed attorneys, CPAs, or Enrolled Agents who can act as your Power of Attorney. So, broadcasting about how they licensed employees on staff must not be considered as a major selling point as they are legally required to do so. That being said, not all licensed tax practitioners are equal.
Another important factor to take into consideration is who will be handling your case during the consultation and proposal phase. There are many tax relief services that don’t get licensed tax attorneys to handle this.
You might even come across tax attorneys who are too eager to sign a power of attorney or a work agreement and get the money before you even had the opportunity to research about them. Chances are, they are hiding something. It doesn’t matter how complicated your situation, you can take out a day or two for due diligence. Apart from this, when you receive a contract or proposal, make sure that they have included personal licensure evidence. A small amount of research now can save you from untold frustrations and thousands of dollars.
You can use the Better Business Bureau complaints as a filter to weed out average or bad tax attorney services. The BBB tracks and reports the complaints that come from verified customers. On the basis of this, they give subjective grades of A+, B+, or A-. But this grade is not of much help because the BBB grades the companies on the basis of testimonials and complaints submitted by the customers.
Suppose a firm has an A rating as they handled 2,000 cases in a year and had 30 to 40 verified customer complaints. This is a major red flag. That is why you need to check the complaints and not the grade.
6. Internet sources
Be very careful before hiring a tax attorney and don’t get carried away with everything you read on the internet. Be careful of the sources you are referring to take the information from the internet. Don't jump to any conclusion before you are completely sure about the tax attorney services.
The bigger the promise a tax relief service is making, the more skeptical you need to be. In fact, if the firm says ‘No’ when you ask for guaranteed results of reducing your tax debt significantly, it is a sign of ethics, honesty, and knowledge. Such firms will spend a lot of time explaining the exact reason why you are not qualified for a reduced settlement. Just remember that if the tax attorneys are making a promise that is too good to be true, go the other way.
8. Flat fee
This is a major point to look out for. Tax relief services that claim to have a flat fee are a red flag. In most cases, they won’t have a flat fee as this is not a viable business model. They make this promise only to get you on the hook. This is why you have to carefully read the work agreement. You will notice that the contract has a few lines detailing how the company can ask you for more money. In case of additional, you might need to pay more than the initial, fixed amount.
9. Ethics and Character
This is simple. Tax attorney firms that are involved in the community services display a true character. When they work closely with charities, do pro-bono work, and perform other acts of ethical behavior, it indicates that the firm is ethical. Another aspect of checking ethics is when tax relief services imply that they get preferential treatment from the IRS or have a special relationship with the IRS officials. Not only are they lying, but they are violating the US Department of Treasury circular 230. This circular includes the legalities associated with practicing before the IRS, including strategies of marketing. If the company is willing to break the law for earning your business, their moral compass and ethical standards definitely come into question.
Many tax attorney firms misrepresent the years of experience. Now, more years does not mean good work as 10 people won’t be working on your case. You will get only 1 or 2. To know about how long a company has been around, you can check them up on the official website of BBB. To know the exact date, you can check the Secretary of State website of the firm’s location.
Now that you are aware of these factors, you are way ahead. With just a little bit of research, you can weed out average tax attorneys and find the one that suits your need the best. A conversation or two can help in knowing which company stands above the rest. The time you invest now will ensure that your financial situation is in good hands.