Tax Debt Companies Disallowed from Collecting Fees in Advance


Starting Oct 27, one of the main practices of the tax resolution industry will be banned – the payment of fees in advance. This rule will be enforced by the Federal Trade Commission (FTC) with the introduction of the Telemarketing Sales Rule (TSR). This law also aims to eradicated unscrupulous practices in the industry such as making false claims about tax debt reduction and not delivering on what is promised. It also seeks to ensure greater disclosure among tax resolution firms.

Unfortunately, the collection of advanced fees is what keeps many of these tax relief frms afoat in their business. As such, many of these companies are trying to fnd some loophole in the new law to exploit. But the FTC has sternly warned against this attempt. Observers agree that although the FTC does not have the authority to create the new rules, it would be foolish to try to exploit them.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Darrin Mish, Tampa Tax Attorney, The Law Offices of Darrin Mish, P.A. | Attorney Advertising

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