by Jay Freeborne , Enrolled Agent
September 4, 2012

The average person who stumbles upon the Tax Problem Resolution Blog is someone that is researching a company to represent them and solve their tax problem.

The three broadest questions on most people's minds are:

What do I qualify for? How is my tax problem going to be resolved?

Am I going to get ripped off by one of these tax resolution companies?

What will it cost?

As many know, we have been monitoring and also a part of the tax resolution industry since 1989. Also, we have been keeping the list of The List of 150 Tax Resolution Companies- since 2008. We have decided that you can really break the industry simply into two groups:

Legit Tax Firms vs. Boiler Rooms

Legit Tax Firms have the following characteristics:

1. Visible licensed tax professionals with actual names on the company website and on the company materials.

2. While length of time in business is important - knowing that a licensed tax professional's name - E.A., C.P.A. or Tax Attorney as part of the organization buys you the protection of knowing that they don't want to trash their license in pursuit of a bad case or by ripping you off.

3. Infrastructure to serve the client: case workers responsible for your case - with individual access, processors equal to the volume the company generates and finally: a staff member who researches every client's case at the beginning of the case to ensure that the company has a clear comprehension of each client's tax problem as seen thru the eyes of the IRS.

4. Reasonable fees that the clients won't regret when the case is completed (if it ever is completed).

Boiler Rooms -- made famous by the movie of the same name -- have the following characteristics:

boil·er room

Noun:
  1. A room in a building (typically in the basement) or a compartment in a ship containing a boiler and related heating equipment.
  2. A room used for intensive telephone selling: "boiler-room stock salesmen".

1. Aggressive sales people unrestrained and unmonitored by a tax professional -- liable to say anything to take your money.
2. High volume advertising and likewise high pressure for sales people to meet quotas to pay for the TV advertising.
3. Little infrastructure to handle high volumes of cases.
4. A plummeting Better Business Bureau record -- weighted by more and more complaints.
5. A company that is eventually going to see the scrutiny of the Attorney Generals or the IRS -Office of Professional Responsibility or the FTC.

Bottomline: Boiler rooms are not sustainable. They provide great riches to their owners for a short period of time: just ask Patrick Cox of Taxmasters, Alex "Ferrari Driving" Hahn of American Tax Relief or JK Harris of JK Harris. These guys made major major bucks before their companies collapsed. Eventually - thru external pressure from governments or the drying up of business to sustain their high marketing costs they go under.

The question on everyone's mind is what company on List of New Tax Resolution Companies is going to end up on this list: Graveyard: 35 Dead Tax Resolution Companies

Finally: looking at cost? Read about fees for tax representation: Fees for Tax Representation

Or what do you qualify for? Read about the new Offer in Compromise program here: Offer in Compromise Rule Changes - Biggest Ever

For 30 years, WATAX has been solving every kind of tax problem. Call us at 1-888-282-4697 or email us a description of your tax issue and we'll contact you.

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