Tax Debt Relief Scammers Promise to Eliminate Your Back Taxes for "Pennies on the Dollar"
Dishonest tax relief companies promise to get rid of your back taxes for "pennies on the dollar" before even looking into your situation. They charge service fees without doing anything and leave you further in the hole. The FTC secured a nearly $10 million settlement against American Tax Service (ATS), which mailed fake government letters demanding people call by a specific date or risk property seizure — and ran ads on TV, radio, podcasts, and online that led to scammy sales calls.
Only the IRS or your state revenue department can decide what tax relief programs you qualify for. No company can guarantee a result, and anyone asking for full payment upfront is a red flag.
What to look for
- Promises that you "qualify" for a tax relief program or that your debt can be settled for a fraction of what you owe
- Requests to pay the full service fee upfront before any work is done
- Letters impersonating the government with threats of property seizure or demands to call by a specific date
- Ads on TV, radio, or podcasts from tax relief companies with no verifiable track record
What to do
Visit the IRS Taxpayer Advocate Service for federal tax help, or contact your state comptroller for state taxes — never pay a private company upfront to resolve tax debt.