The latest action by the Federal Trade Commission (FTC) will allow it to return $16 million in refunds to more than 18,000 customers of American Tax Relief, after the company was found to be taking unfair advantage of consumers. The company, which had been heavily advertised, promised indebted taxpayers that it could significantly ease their burdens.
The FTC said in its complaint that American Tax Relief had claimed to be able to stop tax liens, wage garnishments, bank and tax levies, property seizures, and “unbearable monthly payments.” The company's website once claimed: “The IRS is currently accepting a fraction of back taxes owed...for those who qualify" but that the offer was not being promoted. The FTC reported that the company pocketed more than $100 million in profits by charging people upfront fees of about $3,200 to $25,000.
At the FTC's request, a federal judge closed down the national operation. The company agreed to a settlement without admitting or denying guilt. Under it, American Tax Relief had to turn over millions of dollars in assets. The FTC says former customers will get on average 16 percent of the money they lost.