by Jay Freeborne , Enrolled Agent
April 28, 2008

About 20 years ago, the "tax resolution industry" didn't exist. Tax problems were resolved via "old school" accountants/lawyers who didn't do cases in high volume. These professionals didn't do a lot of problem tax cases. But when they did - they improvised a solution, learning how to navigate the IRS collection system on the fly.

Volume-based representation - firms set up to handle tax problems in large numbers, like ours - began in the late '80's. This time period was essentially when our company, Washington Tax Services, came into existence. The large company phenomenon also came into being once the Offer in Compromise program became wider in circulation and use.

We would say that, for the most part, volume-based representation companies have been a VERY BAD thing for problem taxpayers.

You see the ads on TV..."settle for pennies on the dollar." You get the endless bombardment of mail once you have a tax lien on record. You call up the phone and get a very slick sales pitch from a person who, for all you know, could be some unemployed actor in Los Angeles. The fee is $5000.00 to get you an Offer in Compromise! Two months into the system, clients learn that they DON'T qualify for an OIC. Or that their unemployed actor consultant got a job in the film industry and isn't answering his phone! Or, worse, the company is shut down by the IRS!

In fact one very large firm - the largest that we know of based in South Carolina - lost a class-action lawsuit to 58,000 customers. Sadly, each customer only received $69 after paying their lawyers. (UPDATE 2015: THIS COMPANY IS NOW CLOSED - IT WAS JK HARRIS.)

It's a bad scene out there. Please check out our list here -- A review of 150 tax resolution companies If our company doesn't suit you, we think you would be safe to AVOID any company based in the Los Angeles area - particularly those with a name ending in "TAX RELIEF" OR the aforementioned company in South Carolina. Check out the http://www.bbb.com/ on anybody else.

WATAX is now 25 years in business and A + rated at the BBB. Please call us at 1-888-282-4697 or email a description of your tax problem and we'll contact you!

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