Bruning says consumers should be wary of companies promising tax debt reduction or elimination — especially those charging upfront fees.
Bruning says that regardless of what tax-relief companies may promise, total federal tax debt forgiveness is rare. In very limited circumstances, the IRS may offer a reduction, or abatement, for penalties.
Bruning says the Federal Trade Commission recently announced a settlement with American Tax Relief of Beverly Hills, Calif., accused of bilking consumers out of more than $100 million. The commission also has issued a consumer warning about tax relief companies making unauthorized withdrawals from clients’ bank or credit accounts for additional, undisclosed fees.