How to find a reputable tax debt specialist and avoid getting scammed: Warnings and tips
Let’s be honest. Negotiating tax debt with the ATO can be stressful and time-consuming.
Every day, businesses and accountants seek the help of tax debt specialists to intervene with payment arrangements and tax debt relief on their behalf. Having an expert apply to reduce the debt and secure ATO payment arrangements can solve a lot of problems.
But how do you know who to trust?
Read on to hear how both businesses and accountants can find themselves in hot water with the wrong specialist and five key questions you can ask to find the right help.
What is a tax debt specialist?
Someone who’ll successfully help businesses owing substantial debts to the ATO. They’re skilled at negotiating the total to be repaid and organising manageable payment plans for the business.
What could go wrong?? One accountant’s story.
Accountants: It’s your worst nightmare.
You’ve referred your clients to a specialist to negotiate their $250K debt with the ATO.
After engaging this specialist, you’re stuck with the following outcome:
- Your clients have lost confidence (and $6600 for unsatisfactory services!).
- The still unresolved business debt has ballooned by $50K!
- You spent five months chasing a professional who didn’t return your calls/emails.
- You’re now burdened with arranging a payment plan and getting nowhere.
- You’re giving away your time for free because you feel responsible for the situation.
- Nothing is resolved, and nobody is happy.
This is the story of a Melbourne accountant who trusted their source and made a bad recommendation.
They told us, “This specialist came highly recommended by someone I highly respect. In July 2022, the clients engaged the specialist and paid $6,600 for the services. Unfortunately, there was a lack of progress. I had to consistently follow up with the specialist, who was unresponsive to emails and calls.
Eventually, in December 2022, the specialist finally provided the clients with advice. It recommended selling the business to the established company, which would make instalment payments to the partnership. This money would then be used to pay off the ATO debt. The specialist asked for more money to handle the sale and contracts, but the clients were already unsatisfied with her services and wanted no further involvement with her. She also advised that, as the accountant, I call the ATO to set up a payment plan. So essentially, the clients paid her without receiving much in return. I feel bad about this, as I was the one who recommended her.
I’ve called the ATO five times between December 2022 and January 2023 to arrange a payment plan. The fourth time, they said they’d escalate the case and call back in a week. No one called. I followed up after two weeks, ATO said the same thing, and yet, still waiting for a call. Now, we’ve got a letter warning that the ATO will report the tax debt to credit agencies if action isn’t taken by September 7th. And the debt is now over $300K. As I prepare to contact the ATO again next week, I’m seeking advice on how best to proceed. My initial inclination is to suggest a debt specialist to the clients, but given their bad experiences, I’m too apprehensive to make any recommendations. This situation has taken a toll on me emotionally, to the point that I haven’t invoiced the clients for the time I’ve spent on this matter.”
Working with the wrong tax debt specialist can damage reputations, businesses and client relationships. Don’t let yourself fall into this trap.
Bypass questionable tax specialists that cause more harm than good by asking the right questions and doing the appropriate research.
How to find the right specialist. Our best advice.
First and foremost, do your own checks. They come highly recommended? Great, but don’t take someone else’s word for it. You need to do your due diligence and get solid proof that they can provide the service you need and are successful at what they do.
Looking for a legitimate tax debt specialist? Here are the questions you need answered:
- Are they prepared to negotiate with the ATO? Be wary of companies that may try to persuade the debtor into insolvency and have no interest in attempting to mediate or resolve the debt for a positive outcome.
- Will they provide the service or refer the case elsewhere and pocket a commission? Who are you working with? You need to know if they will be doing the work themselves. They may intend to refer you to a third party, and it won’t be in your best interests.
- Do they have the experience to succeed? Ask for a recent example. Ask if they’ve done this before and what their success rate is. You should be concerned if they stumble over these questions or can’t quickly provide an example.
- Do they have Google ratings, reviews and satisfied clients? Is there social proof to back up their claims?
- Are you going to get stung by unexpected expenses?Ask about upfront and ongoing fees to avoid nasty surprises on your invoice.
Final tips for success.
Unfortunately, accountants and business owners take whopping big risks when working with the wrong specialists.
If your internet research leads you to a landing page, be wary.
If someone gives you a recommendation, do your research.
If a provider can’t answer questions to your satisfaction, move on.
Finally, try searching the service provider’s name to see if Google spits up anything unsavoury. If a background check uncovers some negative associations or a complaint, you’ve dodged a bullet!
A trustworthy specialist will keep you updated on their progress, be transparent about their fees and processes and demonstrate a high success rate.
Thanks for reading! Share these tips, and let us know if you have any to add!
For any business enquiries:
📩 info@tdsau.com.au
📞 1300 310 469