Tax attorney Venar Ayar has been leading a charge to protect consumers and hold deceptive tax resolution companies accountable for unauthorized practice of law.
Recently, two of Ayar’s clients who were scammed by “tax resolution” firms filed complaints with Michigan Attorney General Bill Schuette, prompting a warning from the AG’s office. Schuette warned residents to beware of dishonest tax-relief companies who advertise that their “experienced attorneys and accountants can settle your tax debt for pennies on the dollar.” Schuette said these companies don’t have the professional staff they claim, are unlicensed, and won’t settle tax debts.
Ayar, president and founding tax attorney of Ayar Law, said there are a number of tax resolution companies who advertise themselves as tax attorneys, and lead consumers to believe they are entitled to practice law or provide legal advice, but in doing so, they are committing unauthorized practice of law (MCL 450.681); a misdemeanor crime punishable by six months in jail and a fine. The statute applies to every employee that takes part in making such representations, even if that person happens to be a licensed attorney.
These businesses are not only hurting consumers, they’re hurting real tax lawyers and the legal profession. Ayar has launched an entire public marketing campaign, “Real Tax Lawyers,” to try and heighten consumer awareness and help those with tax problems identify legitimate tax lawyers and avoid being taken by firms with deliberately deceptive advertising campaigns.
“The problem,” said Ayar, “is that these companies rely on the fact that they are not law firms, so that they can sidestep State Bar ethics rules that would apply to law firms, while at the same time advertising in a way that leads people to believe that they actually have an attorney representing them.”
Ayar added that these firms rely heavily on commissioned, non-attorney salespeople. In the legal world, that model would be highly unethical because lawyers are not allowed to split legal fees with non-lawyers, but because tax relief firms are not law firms, they can do whatever they want with their fees.
Several big tax resolution companies have been shut down for false and deceptive advertising practices, but not before taking millions of dollars from consumers. It has been a problem for years, and seems to be getting worse, with new “tax relief” companies popping up all the time, and existing companies that continue to thrive on deceptive practices. According to the Treasury Inspector General for Tax Administration, there are nearly 900,000 taxpayers with delinquent accounts. Couple those consumers with an unregulated “tax resolution” industry and it’s easy to see why the problem has become so widespread.
“The best way to protect consumers and the integrity of the legal profession from these companies is to enforce the existing Unauthorized Practice of Law statutes,” said Ayar. “If these companies are not allowed to advertise as if they were attorneys, then people who are looking for tax attorneys will not hire them. People’s lives are being ruined by this, and these companies will continue mislead consumers as long as they can get away with it.”
Ayar Law represents individuals and businesses with tax problems that require creative resolutions. Offices are located in Southfield, Detroit, Troy, Novi, and Farmington Hills. For additional information, visit www.ayarlaw.com.
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