How Fraudulent Tax Relief Companies Hurt Honest Ones

Last updated on January 25, 2022

The term ‘tax relief company’ has a bad connotation attached to it because of some fraudulent tax companies. The now well-known scams of American Tax Relief, Roni Deutch, and Tax Masters caused widespread distrust of tax relief companies. Taxpayers have begun to doubt any and every company that provides tax resolution services.

Some fraudulent companies took advantage of this distrust among taxpayers to post false consumer complaints on various social networking sites and online consumer complaint boards to hurt their competition. Honest tax companies found themselves facing a crisis. Fraudulent tax companies not only hurt taxpayers, they also hurt the tax resolution industry and honest tax relief companies.

It was honest tax relief companies that have become the target of taxpayers and consumer protection agencies. The Federal Trade Commission (FTC) was even contemplating posing a ban on tax resolution companies from charging any upfront fees. The move could have led to the shutdown of much smaller tax resolution companies. However slowly, taxpayers are re-establishing their trust for the tax resolution industry.

Along with the many positives that came out of revealing scam tax companies, one positive is that taxpayers are now more informed about how to spot tax fraud. They are more aware of how fraudulent tax relief companies operate, and how they can complain against such companies and bring them to justice.