August 15, 2014 – According to today’s Boston Globe, the Federal Trade Commission (FTC) was able to get a federal judge to close down a company taking advantage of taxpayers needing tax relief from their debts to the IRS and state revenue agencies. American Tax Relief is giving back $16 Million to over 18,000 clients for making false promises to them. The FTC said American Tax Relief brought in over $100 Million charging individual taxpayers between $3,200 to $25,000. Not only did the owners of American Tax Relief have to give up all their assets, even the owner’s parents had to give up condominiums, jewelry and money. The FTC alleged that the company did not gather sufficient information from consumers to know whether they would be likely to qualify for either an Offer in Compromise or a penalty abatement.
The FTC said not to expect to get your money back if you paid money to them. They don’t expect to recover for such taxpayers more than 16% of what they paid in, which is exactly what they promised the IRS would get, pennies on the dollar of tax debts. So now these poor folks (literally and figuratively) are far worse off than before they contacted American Tax Relief. If you have been harmed by them, you can register a claim at www.FTC.gov/refunds.
There are many CPA’s and Tax Attorneys that fully understand the rules to reduce, delay or eliminate tax obligations through the various legitimate means such as payment agreements or plans, Offers in Compromise or bankruptcy.
This case, just like a similar one reported in by CBS’s 60 Minutes.
The only silver lining here is that the fees expended to American Tax Relief may be deducted as an itemized deduction if you utilize Schedule A.