If you get a call from someone who claims to reduce or eliminate your taxes and it sounds too good to be true, it could be a scam. Tax season is fast approaching and fraudsters are trying to take advantage of phone calls. If you get an unsolicited call or contact from someone offering help to eliminate your debt, be very careful. It is very likely that he is a scammer.
Some companies and law firms use false promises and deceptive tactics to take advantage of consumers who desperately need help resolving their back tax debt with the IRS. And technically, it's possible to pay off your tax debt for less than the full amount you owe through a commitment offer from the IRS, known as an OIC. In addition, the IRS and the Taxpayer Bill of Rights give you an opportunity to question or appeal what the IRS says you should. Victims often receive a false letter from the agency stating that they have a tax lien or a tax lien and that it is better for them to pay to the “Tax Compliance Office” or else.
IRS scams involve criminals posing as IRS agents, other government employees, or debt collectors over the phone, online, or by mail in an effort to trick you into sending them money to pay taxes, fines, or charges that you don't actually owe. Credit counseling can help you create a debt management plan that allows you to bundle all your debts into a single monthly payment, often at a lower interest rate. The Taxpayer Advocate Service is a legitimate organization within the IRS that helps people get help with IRS issues. If you are the victim of a tax debt relief scam, file a complaint with the Alaska Attorney General's Office.
If IRS scams appear to be impersonating a state tax authority and not the IRS, contact your state's Attorney General's office. Once you have enough money in your account, the debt settlement company will contact the creditor and negotiate a lump sum payment (often for a much smaller amount). While the W-8BEN form, which is called “Certificate of Effective Owner Status Abroad for United States Tax Withholding,” is a legitimate IRS form, criminals have modified it to request personal information, such as the mother's maiden name, passport numbers and PIN numbers. The IRS charges a penalty for non-payment of 0.5% of unpaid taxes per month or part of a month, plus interest.
Debt relief scams target consumers with significant credit card debts by falsely promising to negotiate with their creditors to settle or otherwise reduce consumers' payment obligations. According to the agency, that could happen if you have an overdue tax bill, haven't filed a tax return, haven't paid your employees' payroll taxes, or if you're being subject to an audit or criminal investigation. And even if you save significant amounts in the program, you may owe income taxes on the amount of debt forgiven. It also prohibits debt relief providers from making false statements and requires them to disclose the key information that consumers need to evaluate these services.