Unless you’ve been living in a cave for the last twelve months, you are most likely aware that the tax debt resolution industry has been dragged through the mud and just about every media outlet under the sun has jumped on the bandwagon to kick a little extra dirt on the pile. Now, I’m not arguing that some serious wrongdoing hasn’t occurred, but this is clearly a case of an entire group being stereotyped based on the actions of a few bad apples, and it’s a killer, especially around the tax filing deadline, but it’s crucial to take the time to clear the air and clean up some of the proverbial mud.
One of the most recent examples I’ve seen of this stereotyping cropped up last week; Andrea Coombs used her Ways and Means column on MarketWatch.com to discuss how the demise of three national (and notorious) tax-debt relief companies is a good thing for taxpayers because now they can see how bad all tax-debt relief companies are. The column was followed just a few days later by a MarketWatch.com podcast with Andrea Mitchell picking Coombs’ brain on the same subject. Now, let me reiterate that I am not here to defend the actions of the three companies who were caught red-handed using unscrupulous business practices to make a quick buck off of unsuspecting, well-meaning taxpayers. What I am here to do is to clarify one essential point: not all tax-debt relief companies operate on the same playing field. In her article, Coombs writes, “Who wouldn’t want to pay ‘pennies on the dollar’ to settle their tax debt? That appealing prospect has long been touted in late-night television ads and on billboards, with the smiling faces of self-professed tax experts hawking their tax-resolution services. But in the past 12 months, three well-known firms — TaxMasters, JK Harris and Roni L. Deutch — shut down. Trouble is, paying less than you owe to the IRS is usually too good to be true.”
The truth is, there are actually many of us—yours truly included—who want to see the underhanded business practices being utilized by these companies rooted out at least as much, if not even more so, than anyone. I wish I could say that Coombs’ article is one of the only, or even just one of a handful I have seen on this subject, projecting the underhanded actions of a few well-known and now-notorious companies onto all tax-debt relief companies. Unfortunately, the truth is that Coombs’ is only the latest in a long line of such articles and commentaries that have lumped us all together. And that is why it is clearly time for a massive industry makeover. We not only need to talk a good game, we need to walk a good game, too—words alone will only go so far; we must show by our actions that the tax-debt relief industry is one of high moral value, of customer service and consumer protection. We must show that we are a vital cog in the industry, providing an invaluable service representing well-meaning individuals and businesses to the IRS, securing their rights as taxpayers and enabling them to utilize those rights when necessary.
THE DIFFERENCE IS IN THE MODEL
At Tax Resolution Services, Co., we take great pride in our high rating with the Better Business Bureau and our five-star rating with TrustLink—we created a business model specifically to ensure that our clients can trust that we have their best interests at heart, and we think that the entire industry would benefit from being held legally to the same standards.
Whereas some of these companies that are now out of business and entangled in bitter lawsuits were more focused on the sales side of the ledger, TRS is focused on the consumer side.
That’s why our tax consultants (sales people) must pass a set of rigorous technical examinations before they are permitted to take incoming inquiries from the public. All told, this on-site training period is about four weeks in duration. These “tests” were developed with the help of some of the most nationally recognized tax problem resolution lawyers in the country today. You see, the problem isn’t if you can “sell” or not—the challenge is, and has always been, to properly diagnose each consumer’s IRS/state problems (which entails reviewing their notices/letters from the IRS and evaluating their ability to pay via an in-depth financial consultation based on IRS’s prescribed financial standards for expenses, etc., all prior to accepting a fee from the consumer) and explain to them why the path we are recommending they embark on is more likely than not to happen. Additionally, our model does not allow for consumers who owe under $20,000 in tax liability to retain us—we connect such consumers with the IRS’s Taxpayer Advocate Service.
The other part of our business model that is different from these others is our professional-to-sales person ratio. When you have a business that is solely focused on the numbers (sales) side of things, the entire culture and mentality is turned on its head. The only thing that is important is making sales and, therefore, profits. These businesses lose sight of what is best for the consumer. They forget that they exist for one reason and one reason only, which in the end is to make every customer a “happy” one, who would refer friends and family. At TRS, for every tax consultant (sales person) there are seven to eight tax professionals actually working cases. TaxMasters, JK Harris, and Roni Lynn Deutch’s model was in sharp contrast to ours. Their model employed one to two professionals for every eight to nine sales people. They relied heavily on cable TV advertising to cast a wide net to attract new clients who, for the most part, didn’t qualify for the services these companies were touting and brought consumers in who owed $10,000 or less to the IRS, many of whom didn’t require representation in the first place. We do not advertise on national cable TV.
Also our tax attorneys, CPAs, and enrolled agents are required to obtain the additional designation of Certified Tax Resolution Specialist (CTRS), a credential bestowed on deserving licensed pros issued by the American Society of Tax Problem Solvers. We put every prospective customer through a rigorous financial interview, like the one mentioned above, to determine if they have a viable case on which we think we can prevail, before we will take them on as a client and before we take any money from them. We don’t wait until a client’s entire fee is received before we start working their case, as the other “bad guys” did. On the contrary we work on your case as if we’ve been paid in full, even if we haven’t. These are just a handful of best practices we employ, and if everyone employed them (I wouldn’t have to write this article!) we wouldn’t be concerned with having to dig ourselves out from under this negative media snowstorm.
However, as things stand, we have dug ourselves a hole, and we have no choice but to dig ourselves out. That is where the Tax Problem Resolution Services Coalition comes in. The coalition, which I helped to found a couple of years ago, has drafted legislation to codify best practices that can be enacted federally and statewide; on a larger scale, the coalition will segue into becoming the National Association of Tax Debt Resolution Companies next month, when the association holds its inaugural conference in Washington, D.C., May 20-21, at which point we will be working on drafting legislation that can be adopted federally. This is vital, because the actions of a few have highlighted the need for oversight—and if we try to separate ourselves from the unscrupulous companies instead of using this as an opportunity to take significant steps to come together to regulate ourselves, then the government will do that for us. And my hunch is that we will not be too thrilled with what he government has in store for us if we don’t take the initiative to start the process of regulating ourselves.
More Tax Help, IRS News and Tax Relief Tips:
- Michael Rozbruch Interviewed in Opportunist Magazine
- Ask the Certified Tax Specialist – Small Business Back Taxes
- Tax Resolution Services BBB Rating
- Tax Resolution Services Offers Returning Veterans Free Tax Advice
- New Offer in Compromise Policies Bring Tax Relief
Tags: certified tax resolution specialist, income tax relief, IRS help, IRS problem solver, irs problems, IRS tax problems, Michael Rozbruch, tax attorney, tax attorneys, tax expert, tax problems, tax professional, tax relief, tax resolution services