What Happened
The Federal Trade Commission and Nevada announced a proposed settlement with Terrance Selb and Tyler Bennett, operators of American Tax Service, over an alleged tax debt relief scheme.
The FTC says the operators impersonated government agencies, including the IRS, promised tax debt relief, sent consumers threats about their debts and pocketed tens of millions of dollars. The settlement requires more than $8 million in cash and other assets to be turned over for consumer refunds.
The proposed order also bans Selb and Bennett from debt relief services, tax preparation services, nearly all outbound telemarketing and impersonating people, governments or businesses. The FTC says the larger judgment is $77.7 million, suspended except for the surrendered cash and assets because of the defendants' stated inability to pay.
Why This Matters
Tax debt is stressful enough without someone putting on a fake government voice and selling miracle relief before even checking whether the customer qualifies.
The FTC says the company claimed it could settle back taxes for "pennies on the dollar" or a "fraction" of what people owed, often before evaluating the taxpayer's situation. The agency also says older consumers were targeted with fictitious add-on services that could cost tens of thousands of dollars at a time.
The Dumb Part With The Fake Badge
The dumb part is the costume. If your business model needs consumers to think you are closer to the IRS than you really are, that is not customer service. That is a Halloween store with a call center.
Actual tax help is paperwork, math and boring qualification rules. Fake tax help is urgency, threats and someone promising "pennies on the dollar" before they know whether the dollar exists.
The Bottom Line
The proposed FTC order would claw back money, ban the operators from several related lines of work and block impersonation. The real stupid shit is that people drowning in tax anxiety still have to check whether the "helper" is wearing a fake government mustache.
Sources
FTC: Tax-relief scammers to pay cash and turn over assets worth nearly $10 million
FTC: Original complaint announcement against American Tax Service operators