Television commercials for BlueTax.com claim that they can rid you of burdomsome back taxes. They make amazing claims that they can eliminate penalties and reduce your tax debt. There is a problem with their approach: some of their claims cross the line of what is considered fair advertising.
Federal and state regulators are taking notice of companies that make what they consider to be fraudulent or deceptive claims in advertising. The fact that Blue Tax is airing hundreds of commercials on national television makes them a top target on the radar of consumer protection officials.
The ads by Blue Tax are one of the most aggressive advertising campaigns I have seen regarding tax settlement. Others that preceded Blue Tax have already been punished for making false or unsubstantiated claims. Here are previous tax settlement firms that have been hit with major penalties for false and deceptive claims:
- American Tax Relief claimed to be able to reduce the income tax bills of their clients, even going so far as to mail postcards to those who had federal tax liens to solicit their business. The Federal Trade Commission concluded that American Tax Relief provided no such relief, and ripped off 20,000 clients. Only 600 clients were granted reductions for more than the fees paid to American Tax Relief.
- TaxMasters was sued by the state of Minnesota following an investigation by Attorney General Lori Swanson. Swanson found that TaxMasters’ advertising and sales practice were marred by consumer fraud and deceptive trade practices.
- “Tax Lady” Roni Deutch was sued by California after an investigation revealed that her claimed success rate of 99% was actually only 10%. Attorney General Jerry Brown sued Deutch for $34 million for false promises and misrepresentation in a “heartless scheme” that is collecting “large up-front payments but providing little or no help in lowering their tax bills.” Instead of cooperating with investigators, Deutch shredded some 2 million documents and diverted funds from client refunds to herself and friends. New Attorney General Kamala Harris sought contempt charges against Deutch.
Most of these tax relief scams prey on vulnerable people who are looking for a way out of their tax debt. Blue Tax is no different in the advertising, which crosses the line on providing what should be realistic expectations of future results. It will be up to regulators to determine through investigations of whether Blue Tax sales representatives are making false claims or if they are being direct with clients about success rates and consequences.
At the time of this post, Blue Tax, Inc had a Better Business Bureau reliability rating of “B+” (Rated A+ as of January 8, 2014) which suggests that it has been operating in a fair manner. However, you should check the current BBB rating of Blue Tax before contacting them if you are considering hiring the firm to negotiate a reduction in your tax debt. We cannot say if the company is living up to its promises. What we can say is that its claims mirror those made by other companies that have already been penalized for making fraudulent and deceptive claims.
Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.
Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.
In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.
Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!
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