Home | How to Spot a Tax Debt Resolution Scam

How to Spot a Tax Debt Resolution Scam

Aug 29, 2022

If you are dealing with tax debt, there is a good chance that you could be feeling vulnerable as you desperately search for a solution. Unfortunately, that means there are people out there who will use your fragile state of mind against you to make a fast buck! Like so many others, the tax debt resolution industry is a prime hunting ground for scammers. Even the most intelligent people can find themselves caught up in a tax debt resolution scam when promised quick and easy solutions that will dig them out of their current situation. However, there are genuine and trustworthy tax debt resolution companies out there who really can support you in finding a solution to your tax debt, but they won't be the ones promising a quick fix.

Let's take a look at what you should look for to spot a tax debt resolution scam and find a qualified professional instead.

Common Signs of a Tax debt resolution Scam

If you find yourself questioning the validity of a company offering tax debt resolution, more often than not, your gut instinct is correct. However, a few of the most common red flags could indicate that a company is only out to take your money without helping you resolve your tax debt.

  • Promising a drastic reduction in the amount of tax you will need to pay
  • Promising to eliminate all penalties and/or interest
  • Showing no interest in the reasons behind your tax debt
  • Using delay tactics such as repeated requests for documentation you have already provided
  • Failing to assess your financial background
  • Telling you that your tax debt resolution window has closed or that your Offer in Compromise has been rejected with no explanation after you already paid them a substantial fee

You can also check out the IRS website to stay updated on the most recent scams they have been made aware of so that you are less likely to fall victim to one of them. Now let's take a closer look at a few of those red flags and explore why they are likely to point to a tax debt resolution scam.

Promising to Drastically Reduce or Eliminate Tax Debt

One of the biggest guarantees this type of scam will use is that they can drastically reduce or even eliminate your tax debt completely. It attracts a lot of potential victims because they are desperately trying to pay off a debt that they cannot really afford. However, this is not a guarantee that any tax debt resolution company can make. Only the IRS or State taxing authority themselves have the power to do this, and it is extremely rare for them to forgive tax debt completely.

In terms of reducing the amount that you have to pay, this is a possibility via an Offer in Compromise or Partial Payment Installment Agreement, but there are specific qualifications that you must meet for either of those programs. The IRS or State has the ultimate authority to approve or deny any such proposal. A genuine tax debt resolution company can help you submit an Offer in Compromise or Partial Payment Installment Agreement if it is suitable for your situation, but they should clarify that there is no guarantee of a reduced settlement.

Promising to Eliminate All Penalties and Interest

In most instances, the IRS and State taxing authorities will consider an abatement of penalties petition, but the granting of the request is usually limited to a portion of the penalties, not the full amount. The IRS will only abate interest associated with what was charged directly to penalties that have been abated, and most States will only consider abating interest charged as a condition of a tax amnesty program. If the company is not forthright with you about the chances and methods for this type of relief sought, you are justified with concern!

Failure to Assess Your Financial Background

No tax debt resolution service can help you without first doing an in-depth analysis of your financial situation and background. They need detailed information about your debts, current income, and assets. If the company does not collect this information, they cannot possibly know the scope of your problem, or which resolution programs you can qualify for, and will be unable to act effectively on your behalf.

All is Not Lost - Legitimate Help Does Exist

You might feel a little disheartened after all this talk of scams. Still, it is crucial for you to be aware of the possibility so that you are not dragged into this type of situation when you are already struggling with your finances. The good news is that there are genuine tax debt resolution companies you can rely on to guide you through the tricky road to resolving tax debts. In fact, Golden Lion Tax Solutions was founded on honesty and integrity after seeing firsthand what can happen when tax debt resolution companies lose their moral compass. We set high standards for ourselves and our staff to provide our clients with better tax debt representation than can be found at other companies in the industry. Our clients are our top priority at all times, and we work relentlessly to find the best resolution to suit their individual needs.

We believe in complete transparency and will be open with our clients every step of the way while serving as their advocates. As part of that commitment, we also use our 22+ years of experience in the industry to help educate our clients. We teach our clients about the tax debt resolution we are recommending along with the other options available, so they understand why and how each will benefit them. When they know the process better, they feel more confident in trusting it, which can lift a huge weight from their shoulders.


Trust. Protection. Wisdom.

Your future and your family deserve the right protection. Golden Lion Tax Solutions will be your advisor and confidant throughout the entire journey. We guarantee to offer you or your business best-case solutions for your tax debt. We are by your side every step of the way. Start now and get your life back.

For help with your tax debts, email contactus@goldenliontaxsolutions.com or call 833-LION-TAX (833-546-6829)

Disclaimer: There are requirements that must be satisfied in order to qualify for some of the tax solutions we discuss on our website. Not all of our services will be suitable for every client. Golden Lion Tax Solutions is here to help you find the most appropriate solution to fit your situation.