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Owing the IRS or the state of California has likely crushed you already, thus creating the burden of financial stress. The final thing you want is to see someone capitalize on that fear.

Sadly enough, the tax relief industry is full of those who promise the moon, which in most cases, they promise on a dime, and come to take you in a worse financial state than when you had initially entered the service.

These frauds are so widespread that an annual list of the tax scams maintained by the IRS, the Dirty Dozen, lists Offer in Compromise Mills.

In Leading Tax Group, we have a belief that informed taxpayers are safeguarded taxpayers. In case you need someone to assist you with your tax debt, then you must understand how to differentiate between a legitimate legal practitioner and someone who sells a fantasy. This is how to watch out for the scams and get the actual assistance you need.

The scammers work with two main emotions: fear and hope. To make you believe that they have a secret to get your debt absolved, they engage in aggressive marketing. In the event you come across any of the following red flags, communicate no more.

You may listen to an advertisement on the radio or read a social network message saying, We paid off a $50, 000 debt with only 500 dollars! You can too!”

The Reality: There is a valid program in place offered by the IRS involving an Offer in Compromise (OIC) where eligible taxpayers can negotiate a lesser amount. Nevertheless, it is qualified by the use of a rigid formula of your income, expenses, and asset equity. Not even an honest professional can prove that you are going to qualify without looking at your particular financial situation. When they tell you they will show you something and they have not looked at your numbers, they are lying to you.

They intend to access your credit card number. They are known to take thousands of dollars as an investment fee or retainer, and they have not even examined your tax transcripts.

The Reality: A legitimate tax attorney or professional will normally seek a consultation in order to know the extent of work that would be involved and then charge an enormous resolution fee. They will give a clear engagement letter that will provide them with clear details of what they will do.

Some bad advancement people purport to hold special status with the IRS or some insider information that enables them to make deals unattainable by others.

The Reality: The IRS is a huge federal agency under the government of the Internal Revenue Code. Business does not get transacted on handshakes or friendship; it gets done through law and math. One has no back door to the IRS.

This is a caution about the individuals who want assistance regarding unfiled returns. A ghost preparer will print the return and will instruct you to sign it (2) and put it in the mail, but they will not do so.

The Reality: Any one filling a federal tax return who has been paid to return is required by law to sign the tax return and add their Preparer Tax Identification Number (PTIN). When they decline to sign it can only be assumed that they have provided false information on the return to inflate your refund, and they do not want to be caught.

In matters of your financial future, you can do without a qualified professional who is considered ethically sound. This is how you can tell that you are recruiting the right individual.

Not every tax help is beautiful. To get one of the following, you usually want it to deal with serious tax debt matters (such as audits, appeals, and collections):

Tax Attorneys: Tax law attorneys. Their right of representation is the greatest, and they can represent you in court. Most importantly, they provide the Attorney-Client Privilege, which implies that your discussions will not be disclosed against you to the IRS.

Enrolled Agents (EAs): EAs are federally licensed tax practitioners with unlimited rights to represent Taxpayers to the IRS.

Certified Public Accountants (CPAs): Accountants who have passed the exam of Uniform CPA Examination and are licensed by state boards.

Check their license using these official government databases:

Federal Tax Preparers: These are registered by the IRS Directory of Federal Tax Return Preparers to check their qualification (3).

For Attorneys in California: Attorneys use the State Bar of California Attorney Search to confirm that they are licensed as well as examine any disciplinary history.

For CPAs: California Board of Accountancy License Lookup.

For California Tax Preparers (CRTPs): Confirm that they become members of the California Tax Education Council (CTEC).

Choose the correct questions to ask when interviewing a potential firm. When interviewing a potential firm, question: “Will an attorney or licensed pro be working on my case directly, or will it be a case manager? A large number of the so-called malls utilize illegal case managers to do most of the work.

Protecting your financial future starts with honest advice. Avoid “pennies on the dollar” promises and verify any professional using official IRS and State Bar tools before hiring them.

It is often difficult. Most of the fraudulent businesses apply investment fees, which are non-refundable, in small print. Nevertheless, they are to be reported to the Federal Trade Commission (FTC) at ReportFraud.ftc.gov and the Inspector General of taxation administration (TIGTA) at once.

Yes, the Fresh Start program is a factual set of transformations that the IRS implemented a few years back to ensure that taxpayers can more easily pay back their taxes and evade liability. Nevertheless, the term Fresh Start Program has been frivolously used as a marketing buzzword by the scammers, making it sound as if there is a new and temporary government amnesty.

CPAs would be great in filing the returns and managing finances, but it would be advisable to use a tax attorney in case of dispute and negotiation of debts. The greatest benefit is the Attorney-Client Privilege. In fact, a CPA might be compelled to testify against you even if you committed tax fraud or even in sensitive, unfiled returns.