In a move that upholds the position of the IRS that says taxpayers are best served by contacting the IRS directly to resolve their tax balances, the Federal Trade Commission has seized and halted the operations of American Tax Relief, a tax resolution firm that made big promises, but offered no tangible relief.
As of October 11th of this year, users who click on the company’s web site, www.americantaxrelief.com, are now directed to this one-page message:
“The Federal Trade Commission has filed a lawsuit against American Tax Relief LLC alleging that it has engaged in deceptive practices relating to the advertising, marketing, promotion, offering for sale, or sale of tax relief services. The United States District Court for the Northern District of Illinois has issued a temporary restraining order prohibiting the alleged practices. You may obtain additional information directly from the FTC at www.ftc.gov.”
According to the recent lawsuit filed in Federal Court, American Tax Relief falsely claimed it could substantially reduce taxpayer’s debts to the IRS, collecting $60 million from consumers along the way but offering nothing in return.
The lawsuit also shows that the company was behind in paying its own corporate state taxes. As a result, the state of California suspended its license to practice business.
“We’ve made it a top priority to go after scammers who try to exploit the financial hardship of others,” said David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection. “For people having a tough time paying their taxes, the last thing they need is to lose more money to a fraud.”
In April of this year, federal agents executed a criminal search warrant of the company’s Beverly Hill’s holdings. The search yielded a Ferrari, seized from the company’s owner, and a co-owner was shown to be leasing six other vehicles, including a Rolls Royce, a Bentley, two Porsches and two Mercedes-Benzes.
American tax Relief promoted services that many IRS debt relief companies take advantage of, including jargon and phraseology that endorses the “pennies on the dollar” approach and the false idea that the IRS is, for a brief time only, accepting a “one-time settlement offer.”
According to the lawsuit, up-front fees that American Tax Relief charged varied from $3,000 to $25,000, an enormous sum of cash to lay down when an individual cannot even pay their own tax obligations.
The company offered a “free consultation” with supposed consultants, who were little more than screeners with little to no tax law background. Most consumers “qualified” for the company’s services.
American Tax Relief is one of many tax debt companies that profess professional representation and big-time savings. Consumers are lured under outspoken radio ads and TV spots which promise to lift wage and bank garnishments, remove Federal Tax Liens, reduce liabilities and eliminate penalties and interest.
Along with American Tax Relief, The Law Offices of Roni Lynn Deutch and JK Harris are two such companies that have been under fire lately.
The fact is, there are no options available to any tax lawyer, CPA, attorney or any other third party that are not available to a taxpayer directly. The IRS always encourages taxpayers to contact them directly and immediately in order to resolve any tax balance.
Before you pay out big time bucks to any third party tax resolution company, read up on what you need to know.