FTC Shuts Down American Tax Relief Scam
New York Times, FTC Says Company Promised Tax Relief but Failed to Deliver:
Who wouldn’t like to settle with the IRS for pennies on the dollar?
In recent years, some 20,000 people have turned to American Tax Relief of Beverly Hills, Calif., to do just that after seeing the company’s advertisements on television, the Internet or in print, where actors portraying clients say the company reduced their back taxes to say, $2,000 from $24,000 or $40,000 from $200,000.
But the Federal Trade Commission said Wednesday that despite collecting $60 million to $100 million in upfront fees from often-desperate clients in recent years, American Tax Relief rarely, if ever, delivered on its promises. It did, however, according to the F.T.C., deliver $30 million in customers’ funds to the accounts of the company’s owners or their relatives — money that was spent on a $3.4 million house in Beverly Hills; a garage full of cars, including a Ferrari, a Rolls Royce, a Bentley, two Porsches and two Mercedes-Benzes; and other luxuries. …
Of the 20,000 clients that the F.T.C. says it believes that American Tax Relief signed up, “we have not been able to find a single one” that the company helped to reduce a tax burden, said David Vladek, the chief of the commission’s division of consumer protection.