Well, that took long enough. FINALLY, in an Alert dated December 15, 2011, issued by the Rulings and Regulations Department of the MA DOR, the Taxpayer Advocate’s office basically unleashed their thoughts with respect to National Tax Resolution Companies.
The text of the Alert, issued to email subscribers of the MA DOR, can be found below.
From: Rulings and Regulations
To: Paul L. Mancinone
Sent: Thu, Dec 15, 2011 5:42 pm
Subject: Tax Resolution Companies Harmful To Taxpayer Health
Taxpayer Advocate Alert:
So-called tax resolution companies continually market themselves as the solution to a taxpayer’s problems. Their pitch is simple: pay our company some money and our tax experts will lower and settle your tax liability.
These claims are false. DOR has issued warnings about these claims. If something is too good to be true, it probably isn’t, and that is certainly true about what these companies promise. DOR publishes all Offers in Final Settlement in its annual report. None were reached with the help of a tax resolution company; all were negotiated directly between the taxpayer and DOR.
These companies take money that taxpayers would be better served spending on reducing their tax liabilities. They offer false hope.
But the Taxpayer Advocate has just heard of a new tack from a tax resolution company that sinks to a new low: The company has advised a client to deliberately break a payment agreement worked out with DOR.
Specifically, the company advised a client to deliberately bounce payment checks sent to DOR as a way to get a better payment plan.
This is bad strategy and advice. In the case of this particular taxpayer, a bank levy was issued and an account used to make payroll was frozen. After the taxpayer contacted DOR, the levy was reduced to allow for payroll to be met. The taxpayer got no benefit from the company, only more problems.
Despite the promise of television and radio commercial, these companies will take your money and deliver nothing but broken promises.
First, YES that is a typo from the MA DOR. “If something is too good to be true, it probably isn’t???” I DON’T think that was the message there! However, I included the email verbatim, so there you go!
As a practitioner, I am in total agreement with the MA DOR view with respect to Nationally advertised tax resolutions specialists. What can be more unprofessional and disingenuous than making a claim that you can help someone without knowing the facts? That is a reckless statement, at best. These companies have long since been a stain on the profession, and although I have yet to see an IRS position on it, and can tell you that off the record the collection officers I have spoken to with the IRS are also “less than impressed.”
However, the MA DOR, in this alert does give the impression that Taxpayers can “go it alone” and work directly with them to resolve a tax issue. I cannot disagree with the MA DOR any more, and I am astonished that the MA DOR would actually believe this. Frankly, I don’t think this is really what was meant, but the Taxpayer Advocate did miss a great opportunity to promote locally based CPA’s and tax attorneys, who don’t make false claims and are dedicated professionals. So after 20 plus years of practice, I will leave this post with the following: Any person who deals directly with the MA DOR (or IRS) on an examination or collection matter, without professional representation, does so at their peril. Period.