Last week a client called us because they had just gotten off the phone with un-named firm (hint they advertise on TV and claim to have offices across the country) and they were suspicious of what they had been told.  The salesperson from the firm, asked how much they owed, the caller responded $29,000.  The salesperson from the firm without asking any other questions said his firm would reduce the taxes reduced to $2,000 to $4,000 “if they qualified”, and the fee would be $3,900.  The truth is unfortunately most people don’t qualify for an Offer in Compromise and paying $3,900 for most tax solutions is WAY over priced.  The “if they qualified” statement is a clever sales tactic to avoid promises or guarantees of results. This is done to protect their hard sales process, but will get bad results for the caller. Expect to pay a reasonable down payment or retainer, and then pay as you go and as the firm produces results for you. Never pay full in advance or agree to a contract that has an umbrella fee structure, and always double check if it sounds too good to be true.  BTW, this client never would of qualified for an OIC, but we were able to help them with reasonable payment plan, and yes they only paid for the service that was provided.

Boiler Room -“ Just by the filing the Power of Attorney by our firm will get the Levy Released the IRS (or state). Surprise the sales sleaze hired by this firm also want a large fee in advance by asking for caller’s credit card or checking account number.

Reality -Unfortunately that it is nonsense, the Power of Attorney or POA is a form to allow a firm to communicate with IRS on the taxpayer’s behalf, it doesn’t have any inherent magical powers nor do these firms. There is defined process to get a Levy release, in some cases complicated and in others very simple.

The only reason the lie works is because client is desperate for help and hears what they want to believe. Having your paycheck or bank account Levied is powerful tool used by the IRS and the fear it generates is understandable, exactly what the “boiler room” firms are counting on. Asking good questions about the process will help you find a reliable firm.