Tax Relief AnswersTax Relief Scam Red Flags: 10 Promises No Honest Firm Makes
The short answer
The clearest sign of a tax relief scam is a promise about your result before anyone has looked at your income, expenses and assets. Only the IRS decides whether you get a payment plan, an Offer in Compromise or penalty relief, and the FTC's page on tax relief companies says no company can promise a particular outcome. The ten promises below are the ones the FTC and the IRS have warned about, each with the truth beside it.
Ten promises and the truth
| # | The promise | The truth |
|---|---|---|
| 1 | "We guarantee your debt will be settled." | Only the IRS decides. The FTC says no company can promise a particular outcome, and 16 CFR 310.3(a)(2)(x) bars debt relief sellers from misrepresenting results. |
| 2 | "Settle for pennies on the dollar." | The IRS accepted 5,464 of the 38,797 offers it received in fiscal year 2025, or 14.1%, per the IRS Data Book. The IRS warned in 2024 that "OIC mills" use this exact phrase. |
| 3 | "You qualify" (said on the first call). | Eligibility for an Offer in Compromise depends on a full financial statement. You can check it yourself with the free IRS Pre-Qualifier. The FTC cites "you qualify" claims as a warning sign. |
| 4 | "Pay the full fee today and we start right away." | For debt relief sold by phone, 16 CFR 310.4(a)(5) bars any fee until a debt has been settled or changed and you have made a payment under that agreement. The FTC warns against paying the whole fee up front. |
| 5 | "We can stop the IRS today." | Collection pauses or ends for specific reasons under IRS rules, such as an approved payment plan or hardship status, which you can request yourself. See wage garnishment and bank levies. |
| 6 | "We will remove your lien." | The IRS releases a lien within 30 days after the balance is paid in full and has its own withdrawal rules, per its lien page. See our tax lien page. |
| 7 | "Enroll in the new Fresh Start program." | Fresh Start was the name of IRS changes made in 2011 and 2012. It is not a program you enroll in today; its changes are part of the ordinary payment plan and offer rules, per the IRS's 2012 announcement, now archived. |
| 8 | "We have inside contacts at the IRS." | The IRS applies the same public rules to every case. Claiming a government connection that does not exist violates the FTC Impersonation Rule, 16 CFR 461.2. |
| 9 | "Act now, this offer ends today." | The deadlines that matter are printed on your IRS notices. For example, you generally have 30 days after a final notice of intent to levy to request a hearing, under 26 U.S.C. 6330. |
| 10 | "Our clients save 80% on average." | Debt relief sellers may not misrepresent savings or the share of customers who get results, under 16 CFR 310.3(a)(2)(x). Ask for the source of any number, and be wary of a savings figure that has none. |
The 16 CFR 310 rules cited above are the federal Telemarketing Sales Rule.
Other warning signs
- Ads that look like an IRS notice, with case numbers, "final notice" headlines or seals.
- A salesperson who will not name the licensed enrolled agent, CPA or attorney on your case.
- Payment demanded by wire transfer, gift card or a card charge on the first call.
If you already signed up
- Sign in to your IRS Online Account to see your balance and whether anything was filed. The FTC says some companies never send paperwork to the IRS.
- Ask the company in writing for a refund and for copies of everything it filed.
- Report the company to the FTC at ReportFraud.ftc.gov, and report abusive tax promoters to the IRS on Form 14242.
- Contact the IRS directly about your options, or ask a free clinic for help.
FAQ
What is the biggest red flag with a tax relief company?
A promise about your result, such as a "guaranteed settlement" or "pennies on the dollar", made before anyone reviews your income, expenses and assets.
Is "Fresh Start" a real IRS program?
Fresh Start was the name of IRS collection changes made in 2011 and 2012. There is no current program called Fresh Start that anyone can enroll you in.
Can a tax relief company stop a levy immediately?
No company has that power. The IRS releases a levy in specific situations under its own rules, such as an approved payment plan or hardship status, and you can request those yourself.
What should I do if I paid a tax relief company and nothing happened?
Check your IRS Online Account to see whether anything was filed, ask the company for a refund in writing, and report it to the FTC at ReportFraud.ftc.gov.