9 Red Flags to Watch for in Your Tax Consultation

Taxes are incredibly confusing for the average person, which is why the IRS allows taxpayers to seek outside assistance for help with filing taxes, paying taxes, and addressing tax issues. But not all tax advice is created equal—and following bad advice could land you in serious trouble with the IRS.

Wondering if your tax professional is guiding you in the right direction? Watch out for these nine red flags, and to find tax help you can trust, use TaxCure to find a local vetted tax pro today.

Key Takeaways

• There are only a few types of tax professionals who can represent you in front of the IRS, including tax attorneys, Enrolled Agents, and CPAs.
• Get to know your tax pro during the initial consultation – use that time to determine if they're a good fit.
• Potential red flags include overpromising results, a lack of transparency, and high-pressure sales tactics.
• You should always feel comfortable seeking a second opinion if you feel uncertain.
• A good tax consultation should make you feel empowered and informed about your options.

1. Promises That Are Too Good to Be True

If your tax advisor promises to settle your tax debt for pennies on the dollar, offers a monthly payment amount that seems far too low to ever pay off your tax debt, or promises to erase your tax debt for you, take a step back and think. The IRS gives lots of options to taxpayers, but they don’t give away money easily. Shady companies are notorious for convincing customers they'll qualify for a settlement and then disappearing with their money — it's one of the practices that led to the DOJ shutdown of American Tax Services, LLC.

To qualify for relief options that reduce your tax bill, you’ll need to prove that you qualify. There’s no secret route to tax relief that tax professionals can give you access to, and if they promise you otherwise, they may just be after your money. A seasoned tax pro can give you a good idea of the settlement options available to you after learning a bit about your financial situation, but if they're making promises before getting details, they may be dishonest or inexperienced, both of which can be problematic. 

Instead, look for a tax professional who talks about your options, the chances of different types of relief working for you, and potential challenges you may face along the way. Learn more about the truth about IRS tax relief.

2. Lack of Transparency About Fees

If you’re struggling with tax debt, the last thing you need is a constantly changing bill from your tax professional. Shady professionals may demand large upfront payments without being clear about what is (and is not) covered, leaving you on the hook for thousands more if you want them to keep working on your case. 

Some take advantage of taxpayers’ need for representation by charging ongoing monthly payments for “processing” or “compliance” without actually providing services. To protect yourself, look for a tax professional who outlines their fees clearly, explains exactly what you'll get for the fee provided, and any potential additional costs you may face, and what circumstances would warrant those extra fees. 

You want a written contract that protects you from unethical billing practices and explains what you’re getting. Don't look for the cheapest tax pro – you need high-quality help. But make sure you understand what you're paying for. Check out our guide to tax relief costs. 

3. No Credentials or Vague Qualifications

Any trustworthy tax professional should be more than happy to talk about their qualifications—your finances and tax compliance are on the line, and you deserve to know who you’re trusting. If you’re meeting with a tax professional who doesn’t come out and state their credentials—CPA, tax attorney, Certified Public Accountant, or Enrolled Agent—it may be a good idea to look elsewhere.

Also, be aware of big companies that don't list their tax pros on their website. You deserve to know who's working your case, and often, the big companies don't give clients direct access to tax pros. Take a look at the tax pros who can represent you in front of the IRS.

4. Dismissing Documentation or Paperwork

Documentation and paperwork are the foundation of tax compliance. Any legitimate tax professional knows how to handle a stack of IRS notices, tax returns, and tax forms. If they meet your documents with a blank stare, that can be a red flag. 

The vast majority of tax relief options require documentation—for example, an offer in compromise essentially requires every detail of your current financial situation. If a tax pro is willing to cut corners on documentation or record keeping, you could end up being audited, paying extra penalties, or being accused of fraud.

Instead, look for a tax pro who emphasizes thoroughness, accuracy, and doing tax relief by the book. When you provide everything the IRS asks for, you don’t have to lie awake at night worrying about the IRS taking a closer look at your application.

5. Pressure Tactics and High-Pressure Sales

“If you don’t sign right now, this offer won’t be here tomorrow.” “There are only a few spots left in this program; don’t let this opportunity go.” “If you don’t address this problem by signing up now, the IRS is going to take your house.” "You'll go to jail if you don't pay now." This is one of the practices that got American Tax Services forcibly shut down for stealing tens of millions from customers — their sales team was trained to tell clients that the IRS had marked their files as urgent and was ready to go after them. 

There are cases where you need to act quickly — in particular, if you've received a Final Intent to Levy letter with a 30-day warning. However, even then, high-pressure sales tactics have no place in the world of tax resolution. Again, the decisions you make in this area can determine your financial status and tax compliance for years to come. Legitimate tax professionals understand that it takes time to make big decisions like this, and there are very few tax situations that require an immediate decision. 

Fear-based tactics aim to make you act fast so you don’t have time to explore your options. Instead of succumbing to an aggressive sales pitch, look for a tax professional who encourages your questions, welcomes second opinions, and explains your options without trying to force you into an immediate choice.

6. Cookie-Cutter Solutions for Every Case

Not every taxpayer qualifies for an offer in compromise (in fact, most don’t). Not every taxpayer qualifies for currently not collectible status. Not every taxpayer can afford a standard installment agreement. Despite this, you’ll still come across tax resolution firms that push the same solution on every single client, regardless of whether or not that solution actually fits. 

Why is this an issue? First, it costs money to apply for different tax relief programs. If a tax pro tells you that an offer in compromise is your best offer, but your income is so high that you’ll never qualify, the money you spend applying is wasted. 

This approach also wastes time—every day you spend applying for tax relief options that aren’t right for you is one less day you can spend working on options that do suit your current circumstances. Additionally, tax pros who only have one solution to offer may not know how to apply for other programs. That’s obviously a problem.

Instead, look for a tax professional who looks at your documentation and financial records before making any recommendations. They should be able to explain why certain programs aren’t an option for you, which options are, and which one may be your best path forward. Your tax pro should customize a solution to your needs.

7. Dodging Direct Questions or Providing Vague Explanations

You’ll likely have questions when discussing tax relief options, and the tax professional you choose should have no problem answering them. If you ask them how the IRS handles a specific issue, you deserve a clear response. 

If your tax advisors hems and haws or gives a jargon-filled response that you have no chance of understanding, that’s a bad sign. They may be trying to hide the fact that they do not know the answer, and you deserve a tax pro who can answer your questions with ease.

Instead, look for a tax advisor who explains complex tax concepts and laws in plain English. They should want you to understand the process so you can be involved in your tax resolution.

8. No Written Plan or Agreement

If you decide to move forward with a tax advisor, they should provide you with a written plan or client agreement that outlines what you’ve discussed, what type of tax relief you’ve decided to move forward with, and what their role is in that. A contract protects you if your tax professional fails to act or if they do not follow through on what they promised to do. Without written documentation of what you discussed, you have no recourse.

9. No Plan for State Tax Issues

Tax problems don’t stop at the federal level. Many people who owe the IRS money also owe money at the state level, and if you don’t address both issues, you could still face levies, liens, and wage garnishment. If your tax advisor never asks you about your state tax compliance, they are only getting half the picture. You don’t want to address your IRS tax issues, only to be hit with aggressive state collection actions.

Instead, look for a tax professional who asks about your federal and state tax issues. Ideally, you can have the same person represent you for both—if not, your tax advisor should at least be able to point you in the right direction.

Don’t Settle for Bad Tax Advice – Use TaxCure to Find Help

A tax consultation should leave you feeling informed, supported, and empowered about taking control of your tax situation. You shouldn’t be feeling anxious or like you have to make a split-second decision. You deserve to feel like you are finally taking action and getting your tax situation under control. 

If you walk away feeling confused or suspicious, that may be a sign that you should look elsewhere for representation. The stakes are high. Bad tax guidance can leave you with sizable penalties, increased scrutiny from the IRS, and more financial problems down the road.

The good news is that you do not have to settle for subpar services or fly-by-night companies. There are trustworthy tax professionals out there, and we can help you find experienced, proven tax pros in your area. By working with qualified attorneys, CPAs, and Enrolled Agents, you can get the peace of mind that comes with tax compliance. Start your search on this page now, or use our directory to find tax pros near you.