Beware of Tax Collection Scams

The IRS does not make telephone calls to collect money or threaten action. The IRS does not have a "supervisor" that will meet a taxpayer in a parking lot to accept a cash payment. The IRS does not accept cash payments in parking lots, garages, or public parks. If anyone calls you and threatens wage levies or seizing your property, hang up, block the caller's phone number, and call the IRS at the number shown on your most recent letter from the IRS. Beware of organizations and telemarketers that are paid on an incentive basis for bringing your business to their firm. Be especially aware of unrealistic promises or improbable results. You want to be sure that you receive top quality work and that you get the services that you pay for.

Beware of firms that charge you a fee exclusively based on the amount of money that you owe the IRS. Usually, the same procedural steps are required to solve both large and small tax obligations.

Beware of evasive, confusing, or "too good to be true" answers to your direct questions about your case. If the firm is evasive or their answers seem intentionally complex, it is possible that they are trying to disguise direct answers to your questions. You deserve straightforward answers.

How to find a Tax Professional

Ask friends, relatives, and co-workers who have gone through problems with the IRS to refer you to their tax professional. Ask them how much they paid, how attentive their professional was, and how quickly that professional grasped the tax problem and offered possible solutions.

Contact local bar or accounting associations. They may have a referral panel, where you can specify your interest in referrals of specialists in taxes, tax debt negotiations, and representing taxpayers before the IRS.

Request an initial conference or interview with your prospect professional to discuss your tax situation and problem. Often tax professionals will provide one hour of free consulting as a way of getting to know a new client, getting an idea of the tax problem, and with that the tax professional can provide a general idea of the cost of their service and what might be some possible outcomes, as well as discussing their track record.

Internet, yellow pages and newspapers feature tax professionals who could also be screened as mentioned above.

The current standing of licenses, any disciplinary actions, an other information for CPAs and attorneys can be viewed online on the websites of each State's Bar Association or Boards of Accountancy. Better Business Bureau ratings are also worth checking.

Tax professionals who are licensed or registered with the IRS include:
  • Attorneys
  • Certified Public Accountants (CPA)
  • Enrolled Agents

Tips & Reminders:

  1. You can always increase your monthly payments to help pay off your balance in a shorter period of time.
  2. The IRS will generally not file a tax lien where either a Guaranteed or Streamlined Agreement is requested.
  3. Payments for agreements over $25,000 must be made by direct debit or payroll deduction.
  4. Choose a date for your payment that works with your budget but is not later than the 28th of the month.
  5. The IRS has a set-up fee due with your first payment. The fee is currently $31 for direct debit agreements done through the Online Payment Agreement and $149 for all other Online Payment Agreements. If you don’t use the Online Payment Agreement, these fees rise to $107 and $225 respectively. If your income is under a certain amount, you may only have to pay a $43 fee.
  6. The proposed payment is equal to or greater than the "minimum acceptable payment" (the minimum acceptable payment is the greater of $25 or the minimum payment amount reached by dividing the tax liability, interest, and penalties by 50)
  7. According to the Statue of Limitations, the Internal Revenue Service (IRS) has 10 years to collect unpaid tax debt. Generally, if the last date for an installment payment falls beyond 10 years from the date a return is filed the IRS will request a signed waiver of extension for the time to collect taxes as a condition to granting an installment agreement.
  8. All required individual income tax returns for all years should be filed, otherwise any application for a payment plan could be delayed or not approved until all returns are on filed with the IRS.
  9. For any years that individual income tax returns are due those returns can be submitted along with any request for a payment plan. This will give the IRS a complete picture of your taxable income and tax payments thereby furthering consideration of any application for a tax payment plan.

PLEASE NOTE: The calculations, tools, and information provided on this website are strictly limited to U.S. Federal Individual Income Taxes reported on Form 1040 and should not be relied upon for payroll, state, corporate, or other kinds of taxes.