Falling behind on taxes is stressful, and many taxpayers turn to tax relief companies for help. But not all are legitimate—tax relief scams prey on people desperate for a solution, making big promises but failing to deliver.
Some companies guarantee settlements for pennies on the dollar, demand large upfront fees, or use high-pressure sales tactics to rush you into signing up. These scams leave taxpayers worse off, often with more debt and IRS penalties.
So how do you spot a tax relief scam before it’s too late? In this guide, we’ll walk you through the biggest red flags to watch for and how to protect yourself from fraud.
1) Guaranteed Results – “We Can Settle for Pennies on the Dollar!”
When you’re struggling with tax debt, the idea of settling for just a fraction of what you owe sounds appealing. Scammers know this—and they exploit it by promising guaranteed results before even reviewing your case.
One of the most common tax relief scams is companies advertising that they can settle your debt for “pennies on the dollar.” They claim to have a special relationship with the IRS or an exclusive program that ensures your tax debt will be reduced or eliminated. But here’s the truth:
No tax relief company can guarantee a specific outcome.
The IRS does offer relief programs, like Offer in Compromise (OIC), which allows some taxpayers to settle for less than they owe. However, the approval process is strict, and most applicants do not qualify. The IRS considers factors like income, expenses, assets, and ability to pay before approving any settlement. A legitimate tax professional will evaluate your financial situation before making any claims about what’s possible.
How to Protect Yourself:
- Be cautious of companies that promise results upfront without reviewing your case.
- Avoid firms that advertise settlements as a guarantee—no company has special IRS connections.
- Work with a licensed tax professional (like an Enrolled Agent, CPA, or Tax Attorney) who provides honest assessments based on IRS guidelines.
Work with a licensed tax professional (like an Enrolled Agent, CPA, or Tax Attorney) who provides honest assessments based on IRS guidelines.
Scammers thrive on false hope, but real tax relief is based on facts, not guarantees. Next, let’s look at another major warning sign: large upfront fees with no transparency.
2) Large Upfront Fees with No Transparency
Another major warning sign of a tax relief scam is companies that demand large upfront payments before doing any real work. While legitimate tax professionals charge for their services, scammers take your money and disappear.
Many victims report paying thousands of dollars upfront, only to be left with no progress on their case. In some cases, these fraudulent companies stop responding entirely, leaving taxpayers in an even worse financial position.
A legitimate tax relief firm will always be upfront about costs and how their fees are structured. They may offer payment plans or break down services into stages—so you’re not paying everything before any work begins. Transparency is key. If a company refuses to explain exactly what you’re paying for, it’s a red flag.
How to Protect Yourself:
- Be wary of tax relief companies that demand full payment upfront before reviewing your case.
- Ask for a detailed breakdown of services and costs before signing anything.
- Work with professionals who offer clear pricing structures and may allow payment plans.
If a company is more focused on getting your money than solving your tax problem, it’s time to walk away. Next, we’ll discuss another common scam tactic: high-pressure sales tactics designed to rush you into a bad decision.
3) High-Pressure Sales Tactics
If a tax relief company is rushing you to sign up immediately, take it as a major red flag. Scammers rely on fear tactics to push people into quick decisions, often claiming that “the IRS is about to seize your assets” or that you must act now to avoid legal consequences.
These companies create a false sense of urgency, making it seem like you’ll lose your home, bank accounts, or wages if you don’t sign up right away. They may also pressure you by saying their “special offer” or “limited-time program” is about to expire. But the truth is, legitimate tax relief professionals don’t operate this way.
A trusted tax relief firm will give you time to review your options, ask questions, and make an informed decision. They won’t pressure you into signing contracts or handing over credit card details before understanding your financial situation.
How to Protect Yourself:
- If a company uses fear or urgency to force you into a quick decision, walk away.
- Be skeptical of “limited-time tax relief programs”—the IRS doesn’t offer special deals.
- Choose a tax relief provider who answers your questions and explains your options clearly.
Scammers want you to panic so you don’t have time to think critically about their offer. A legitimate firm will work at your pace, ensuring you understand your tax relief options.
4) Fake IRS Representatives and Threatening Calls
One of the most frightening tax relief scams involves fake IRS agents calling taxpayers and demanding immediate payment. These scammers pose as IRS officials, claiming you owe back taxes and must pay immediately or face serious consequences like asset seizure, wage garnishment, or even arrest.
This is a scam—the IRS will never call, email, or text you to demand payment. The IRS always sends written notices before taking any action, and they will never threaten to send law enforcement or require payment over the phone.
Scammers use aggressive tactics, sometimes even spoofing caller IDs to make it look like the IRS is calling. They might demand payment through wire transfers, prepaid debit cards, or gift cards, which the IRS never accepts as payment methods.
How to Protect Yourself:
- If you receive a call from someone claiming to be the IRS demanding payment, hang up—it’s a scam.
- Never provide personal or financial information over the phone or via email.
- To verify whether you owe taxes, contact the IRS directly at 1-800-829-1040 or check your account at IRS.gov.
- Report IRS impersonation scams to the Treasury Inspector General for Tax Administration (TIGTA).
If someone is trying to scare you into an immediate payment, it’s not the IRS—it’s a scammer.
5) No Licensed Tax Professionals on Staff
If a tax relief company doesn’t have qualified professionals handling cases, that’s a major red flag. Many scam operations lack licensed experts, meaning they have no legal authority to represent you before the IRS.
A legitimate tax relief firm will have Enrolled Agents (EAs), Certified Public Accountants (CPAs), or Tax Attorneys on staff—professionals who are certified to negotiate with the IRS on your behalf. Scammers, on the other hand, often rely on unqualified salespeople to make big promises without actually having the expertise to deliver results.
Before trusting any tax relief service, verify their credentials. A reputable firm will be transparent about who is working on your case and will provide proof of their qualifications upon request.
How to Protect Yourself:
- Ask for credentials—legitimate tax relief professionals will be open about their qualifications.
- Check if they are IRS-authorized tax professionals by searching the IRS Directory of Federal Tax Return Preparers.
- Avoid companies that refuse to disclose their team’s qualifications or only employ sales reps with no tax expertise.
If a company can’t prove they have licensed professionals handling your case, they’re not worth your time or money.
What to Do If You Suspect a Tax Relief Scam
If you think you’ve fallen victim to a tax relief scam, it’s important to take action right away. Scammers prey on taxpayers who are already in a difficult financial situation, but there are steps you can take to report fraud, recover lost money, and get real tax help.
1) Report the Scam
Scammers rely on deception to target more victims. By reporting fraud, you help shut down fraudulent operations and prevent others from falling into the same trap.
- Report scams to the Federal Trade Commission (FTC)
- File a complaint with the IRS Office of Professional Responsibility
- If the scam involved identity theft, report it at IdentityTheft.gov
2) Try to Recover Your Money
If you’ve already paid a fraudulent tax relief company, you may be able to dispute the charges:
- Contact your bank or credit card company to request a chargeback or fraud investigation.
- If you paid by wire transfer, prepaid card, or cryptocurrency, contact the transfer service immediately—but be aware that these payments are often non-refundable.
3) Get Help from a Reputable Tax Professional
If a scam company has failed to resolve your tax issues—or made them worse—it’s critical to seek legitimate tax relief assistance from licensed professionals like Enrolled Agents, CPAs, or Tax Attorneys. When working with a legitimate tax relief professional, they can review your case and work with the IRS directly to find a solution for you.
Don’t let a scam set you back even further—there are real solutions available to you.
How Andrin Tax Relief Can Help
Tax relief scams play on fear and uncertainty, but knowing the warning signs can help you avoid costly mistakes. If you suspect a tax relief scam, take action—report fraud, dispute charges if possible, and seek help from a reputable tax professional.
At Andrin Tax Relief, we provide honest, professional guidance to help you resolve tax debt—without false promises or high-pressure tactics. Our team of Enrolled Agents works directly with the IRS to find real solutions tailored to your financial situation.
Before committing to any tax relief service, always research the company, verify credentials, and ask questions. If you need legitimate tax help, schedule a free consultation today and take the first step toward resolving your IRS issues the right way.
