Yesterday, Tax Masters announced that it plans to file for bankruptcy. Remember the guy with the red hair and grizzly beard who claimed he could settle debts owed to the IRS for pennies on the dollar? That was Tax Masters and apparently they have a whole lot of unsatisfied customers.
According to the Texas attorney general’s office, Tax Masters lied and were deceptive in their advertising. They made promises to their customers that they couldn’t keep. And the sad part? Their customers bought it! (Or maybe they bought that folksy guy with the beard.)
I know I’ve said this before but I’ll say it again. There is no such thing as a free lunch. How is it that the IRS would accept a fraction of what you owe them? But that’s what Tax Masters were offering. If you want to lower your taxes and do it legally, hire a tax attorney to help you.
Also, do not hire a CPA solely because that CPA supposedly got your friend tons of money through a tax refund. Assuming every CPA gets the same info for doing tax returns, what it really comes down to is how aggressive a CPA wants to be with claiming deductions and deferring income.
In other words, do your due diligence and you won’t get taken by people like Tax Masters. Before you hire any professional adviser, make sure you get a few references. That means don’t hire a financial adviser, an accountant, an insurance agent, a bookkeeper, an attorney, or even your nanny until you’ve researched them, gotten references and are convinced that they are reputable.
So to sum things up:
- There is no such thing as a free lunch.
- Get references before you hire professional advisers.
- Communicate and stay involved with your adviser or your employees.
- Don’t grow a red beard.