Ads Offering Tax-Relief Are Full Of Broken Promises, Just Want Your Money

This may not come as a surprise to any of you, but those ads on the radio that offer to settle your debt to the Internal Revenue Service for a fraction of the bill may be a scam.

Officials with the Federal Trade Commission are warning consumers to be aware of these so-called “rescue” programs that, in reality, can cost consumers thousands of dollars and provide no tax relief, the Washington Post reports.

To make matters worse, some consumers told the FTC they not only paid thousands of dollars in upfront fees for the tax relief service but also subsequently found unauthorized charges to their credit cards or withdrawals from their bank accounts.

The companies who tout the chance to settle consumer debts for mere pennies often don’t even send the necessary paperwork to the IRS for consideration into the Offer in Compromise (OIC) program, which allows consumers to pay less than their full tax payment under certain circumstances.

In fact, the odds are against an applicant being accepted into OIC.

To qualify for the program consumers must show they can’t pay their full tax liability because it will create a financial hardship. If IRS officials don’t believe that your debt can be paid in full as a lump sum or through a payment plan you may be one of the lucky few accepted into the program.

Last year, the IRS received nearly 74,000 requests for the program and only accepted 31,000 consumers.

Taxpayers can actually apply for the IRS relief on their own. To determine eligibility consumers can use the agency’s pre-qualifier tool at irs.gov.

If you don’t qualify for the OIC program there are other options available. The IRS has expanded its help for struggling taxpayers including payment agreements.

Consumers who are lucky enough to receive a tax refund from the government, should still be on the look out for those who want to take that money away from you in the form of identity theft.

Earlier this year, the National Consumers League issued a scam alert warning consumers of ways scammers can take your hard-earned cash. Generally, tax season identity scams work in two ways: scammers use a stolen Social Security number to file the tax return, or they use the stolen identity to obtain a job. In both cases consumers aren’t likely to discover the problem until much later.

Unfortunately, rescue companies and identity thieves aren’t the only groups targeting taxpayers. Last month, the IRS issued a warning for consumers to be mindful of unsolicited calls claiming to be from the agency and requesting mont for owed taxes.

In all, the agency reported it received more than 20,000 reports involving victims who lost at least $1 million in the scheme.

Tax-relief ‘rescues’ are really a ruse [The Washington Post]

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