A business owner sent me an email about her tax issues: she owes lots of money, the IRS has filed lien notices, she can’t make her payments. Her CPA recommended she contact me; other tax-resolution firms have contacted her with outlandish promises. She forwarded one email solicitation, and writes:

JOHN HERE IS SOMEONE WHO SAID EVERYTHING RIGHT AND TOLD ME THEY WOULD GET LIENS REMOVED AND MOST OF MY PENALTIES AND THE INTEREST ON THE PENALTIES REMOVED. THEY NEGOTIATE THEY SAY FOR WHAT SEEMS MAYBE TOO GOOD TO BE TRUE.
COULD THEY BE REAL?

I responded as follows:

Hello Nancy:
Here is what I find from a quick search on the internet on this company.
Its Better Business Bureau standing is quite high. However, I know that the BBB can be bought. This doesn’t tell me much.
A search of the business name suggests that the enterprise was recently called Dartmouth Financial Group. Websites under that name have lapsed; you or I could purchase the name from GoDaddy. Yelp has a one-star review. Pissed Consumer gives it 1.9 stars.
Somebody on the “Consumer Affairs” website gave them one star, but then later upped it to four without much comment. This review also has a lengthy testimonial of the firm from another firm in a different state. Something here strikes me as strange.
There are other comments out there too; I’m sure you can find them.
The company’s current website doesn’t give a single name of a principal or an attorney. That would bother me.

Dartmouth Financial?!

The review mention two principals by name. Now, I have a strange connection here: I graduated from Dartmouth College, so a firm that once called itself Dartmouth Financial catches my interest quickly. I checked the alumni directory: there are no living alumni with these names.

How can the firm promise what it claims? I don’t know. I spent 10 years as a docket attorney at the IRS. I had a huge amount of authority over my cases: if the IRS said someone owed $100,000 and the taxpayer filed a tax court petition, I could easily get the bill down to $10,000 if I thought it was the right thing to do. I overruled auditors all the time. But I had no authority to abate interest; that required review by attorneys in Washington.

I also had almost no authority to abate penalties. Again, this would require high-level review.

I advised collection officers in their work as well. Once the IRS put down a lien, it was very difficult to remove it. The only way to get around the lien was to subordinate and use the proceeds to pay the IRS. Otherwise, the IRS waits for full payment before removing a lien notice. If there is some other way to do this, I have no idea, and I spent 10 years inside dealing with exactly these issues.
– John

The lesson: there are many tax resolution firms who are eager to take your money and do nothing. Educate yourself on what legitimate relief is available; you can start here. Then, do a little homework to find the honest firms.

February 23, 2018