Arizona Tax Lawyer Blog

I commonly receive calls from taxpayers in Arizona who have just hung up the phone with a "tax controversy" firm they found on the internet or tv.

Despite the fact that these calls are common, I continue to be shocked at the fees charged and tactics used by these firms.

If you have serious tax debt, great care needs to be taken when paying someone to help you solve it. Here are some reasons why:

1. Most tax organizations that you see on tv and hear on the radio are not law firms. They are highly specialized sales organizations.

2. The salespeople in these organizations are trained to scare the taxpayer about what the IRS may do to them in order to... you guessed it, make the service seem much more valuable then it is.

3. They are also trained to make it appear there is some "secret" ability to obtain an enormous reduction in the overall debt and remove the fear, and they are in on the secret.

4. They usually base a fee not on what the time involvement may be to help solve the problem, but on what they believe can be paid by the taxpayer. They do this by reviewing your assets a bit with you over the phone, including available credit you may have.

5. This fee is not typically based on the remedy. There is no correlation between the solution and the fee. You may end up paying the same very large flat fee for whatever is done, no matter how small or large.

6. The solution they sell although promising for some, doesn't work for most. That promised solution is the offer in compromise.

7. Despite the fact that the solution is usually something that requires less work than the offer in compromise, they keep the large fee anyway in the end.

My advice to Arizona taxpayers:

If a "firm" quotes you a very large fee for a tax resolution service without reviewing all of your documents, history and then comparing the available non bankruptcy options to bankruptcy itself, be very wary.

In fact, do yourself a favor by contacting a local tax attorney who bills by the hour, or whose flat fees are reasonable, and have that firm review your case.