Companies Promising Reduction of Delinquent IRS Tax Debts Fleecing Consumers

If you spend much time watching television these days, chances are you've seen advertisements on TV from J.K. Harris and other tax relief firms who give out a toll-free number, promising easy settlements with the Internal Revenue Service for taxpayers who owe sizeable, delinquent tax balances along with the usual draconian interest and penalties. Do any of these companies advertising relief from the IRS actually help any of their clients clear out their tax problems? Who should a taxpayer consult if they have tax problems, if it isn't one of these tax relief firms who are obviously spending a lot of money advertising during prime time TV?

Let's take a look at the "effectiveness" of some of these tax relief firms and you can judge for yourself. One such tax relief firm, headed by a Roni Lynn Deutch, advertises on TV, that she can "settle your tax debts for pennies on the dollar." At one website, ripoffreports.com, an angry customer writes in, that Ms. Deutch wants anywhere from "$1,900.00 to $4,300.00 to hire the firm," and that some people have paid as much as $15,000.00 for "help" from Roni Lynn Deutch. The Deutch firm reportedly records calls from customers with tax problems, noting the size of the tax debt, and then uses aggressive salesmen to pursue the battered taxpayer with promises of relief from the IRS, if they'll just forward a large retainer. This is easy to believe, since I have had tax problems of my own, and routinely received postcards from similar tax relief firms claiming they knew what my tax liability to the IRS was, to the penny, and that all I had to do was call them to arrange a "consultation."

A cursory review of a website known as the "complaints board," reveals a common modus operandi of Roni Lynn Deutch and other tax relief firms that we will examine. The tax relief firm gets you to sign a power of attorney form, granting the tax relief firm control of your dealings with the IRS. The typical retainer given to the Deutch firm would be upwards of $2,000.00 to put the troubled taxpayer in a "non-collectible status" with the IRS, i.e., a situation where the IRS determines that they are unlikely to collect the balance due them by the taxpayer. Then the stalling starts, once the tax relief firm has the retainer, and when the tax relief firm determines they can't solve the taxpayer's problem, they tell the taxpayer "they can no longer represent them." Most of the complainants reported that their tax problem was worse after engaging the services of Roni Lynn Deutch, and that even after paying a sizeable upfront retainer, the taxpayer still had the problem with the IRS they had when they contacted Roni Deutch, and with penalties and interest accruing, actually ended up with a bigger problem. Of course, these tax relief firms always claim they can't "guarantee" they can resolve your tax problems, but they make a lot of promises to a lot of desperate people by claiming they know the special tax codes designed to give them relief, when most people would have been better off trying to deal with the IRS directly themselves.

In case anyone reading all this about the Roni Lynn Deutch firm thinks that perhaps the complaints against them may be somewhat biased, let's take another example from the case of another tax relief firm known as American Tax Relief. This company also advertises heavily, claiming, in one case, to be able to settle a "$50,000 tax debt owed by a Brooklyn, NY woman, for $5,000," according to ConsumerAffairs.com. In June of 2006, this woman paid $5,000 to American Tax Relief to try to settle a $50,000 tax debt, and when she was left with an $80,000 tax debt as a result, she sued American Tax Relief. New York City's Dept. of Consumer Affairs filed a lawsuit against American Tax Relief as well when ATR sent out "junk mail with exaggerated promises." Included in the complaint made by the Dept. of Consumer Affairs was the charge that ATR "collected large fees" but failed to "clear their clients' tax debts."

Then there's the case of J.K. Harris. This tax relief firm is well known for advertising on TV, and usually features a troubled taxpayer who has their face blurred out to add to the phobia people already have in dealing with the IRS, by making it seem as though the "satisfied customer" has to hide their identity from the IRS. A class action suit was filed against J.K. Harris in South Carolina, and the settlement was $6 million. Old news. The South Carolina Dept. of Consumer Affairs reports that there were "over 1,000 complaints against J.K. Harris," as of August of 2009. Numerous complaints have been filed with ConsumerAffairs.com, typically complaining of how they made payments to J.K. Harris, to supposedly help them solve their problems with the IRS, and usually ending up with a tax problem that was greater than before they contacted J.K. Harris. Still other taxpayers reported that they were able to get better results dealing with the IRS themselves than they were when they authorized J.K. Harris to act on their behalf.

This doesn't mean the answer is to always deal with the IRS yourself. There are times you may need to hire a lawyer or a competent tax professional. The point is, that these self-designated tax relief firms such as Roni Lynn Deutch, American Tax Relief, J.K. Harris, and others who advertise heavily on TV, shouldn't be trusted. When they promise results concerning your IRS tax problem BEFORE they've contacted the IRS on your behalf, it should raise a red flag. If a tax relief specialist puts a lot of pressure on you to pay a large retainer, such as $2,000 or $5,000 up front, before doing anything on your behalf, check to see if there are BBB complaints or complaints on the internet. The last thing a taxpayer needs, when they have trouble with the IRS, is someone ELSE taking all their money before the IRS returns to claim their share, after the tax relief firm fails to deliver on a costly promise they made to you.