What are the red flags?

Guaranteed settlement for a fraction of what you owe before reviewing your situation; Demand for full fee upfront; Mail or ads impersonating government agencies.

What should I do if I clicked, paid, or replied?

Only IRS or your state tax agency can decide what you qualify for; Walk away from upfront full-fee demands; Use IRS Taxpayer Advocate Service for unresolved federal tax problems; Report at ReportFraud.ftc.gov.

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Tax / financialMailTV/radio/podcast adsPhone sales calls

Fake tax debt relief companies

Last updated Oct 15, 2026

Also known as: pennies on the dollar tax scam, ATS-style tax relief

What it looks like

Companies promise to wipe tax debt for ‘pennies on the dollar,’ sometimes with mail that impersonates the government and deadlines threatening property seizure, then charge upfront fees without delivering real help.

Who it targets

People who owe or worry about back taxes.

Red flags

Guaranteed settlement for a fraction of what you owe before reviewing your situation
Demand for full fee upfront
Mail or ads impersonating government agencies

What to do if you clicked, paid, or replied

Only IRS or your state tax agency can decide what you qualify for
Walk away from upfront full-fee demands
Use IRS Taxpayer Advocate Service for unresolved federal tax problems
Report at ReportFraud.ftc.gov

Still circulating?

FTC August 2026 alert referencing nearly $10M settlement with American Tax Service owners.

Primary source: FTC Consumer Advice · 2026-08-13

Educational summary only. Verify details on the source page. Report fraud at ReportFraud.ftc.gov or ic3.gov.