American Tax Relief claimed to be able to reduce the income tax bills of their clients. Their television commercials were compelling. To further attract clients, they mailed postcards to solicit the business of those hit with federal tax liens.
An investigation by the Federal Trade Commission concluded that 20,000 consumers paid upfront fees for worthless tax relief services. Fees ranged from $3,200 to $32,000.
Clients made multiple payments, but often received nothing in terms of services. Often the first clue that they had been ripped off was the unreturned phone calls.
Instead of providing legal representation to help negotiate tax bills with the Internal Revenue Service, many clients were left to fend for themselves. There were allegations that when work was done, that it was completed by unlicensed employees rather than attorneys.
There were issues of unauthorized bank drafts and charges made to clients’ credit cards without permission. When clients protested, calls were ignored and refunds were rarely provided.
The first clue should have been the outrageous claims made by American Tax Relief. No entity can help you settle your IRS debt for pennies on the dollar. If you believe such claims and fail to check out the company’s reputation, then you share some of the blame for your situation. The Federal Trade Commission and states’ Attorneys General also share some blame, since scams of this magnitude should be shut down before they grow to such levels. It took the discovery that American Tax Relief failed to pay their own income taxes to finally put them on the radar.
To verify the claims made by American Tax Relief or any other company, always check their rating with the Better Business Bureau. Also, research the company to look for positive and negative comments from their clients. Just a few minutes of researching tax relief scams and reviews of legitimate providers can save you thousands of dollars in fees and some sleepless nights.
For American Tax Relief, this may be the end of the road. Owner Alex Hahn has had his assets frozen, and the same has been done to the company’s assets. American Tax Relief bilked customers out of $60 million. It is expected that Hahn’s $3.4 million home in Beverly Hills will be seized, along with the two Porsches, a Ferrari, two Mercedes, a Bentley and a Rolls Royce. FTC Consumer Protection director David Vladeck pointed out that the owners of American Tax Relief didn’t even buy American.
If you were a client of American Tax Relief, consider telling your story. Make sure you avoid providing any emails or telephone numbers in your comments.
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!
"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."