Consumer Investigation: California tax firm targets Rochester-area debtors with threatening letters

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ROCHESTER, N.Y. – When you’re in debt, the letters and phone calls won’t stop coming.  It may feel like the walls are closing in.  That’s why the tactics used by a tax firm in California are especially troubling.  The company is targeting debtors in our area with threatening letters.

The company is called American Tax Solutions.  But you don’t know that when they write to you. The company sends letters that look like they came from the government, threatening to take your house.  I began investigating this company last week.  And I’ve now learned ATS is sending the letters all across the country.

The letter comes in an official looking perforated envelope.  And the message inside is threatening. It’s says it’s from the Tax Processing Unit, Internal Processing Service, Monroe county.  And in bold letters it says your property will be seized.  It ends with the message, “To avoid enforcement” call an 800 number.  But Monroe County doesn’t have an agency called the Tax Processing Unit.  After some digging, I learned the letter was sent by the private California firm.

I called the 800 number and spoke to a man who, after a series of questions, told me he worked for ATS Tax Group.  I asked him whether his firm made a practice of combing through public records and sending scary letters to debtors to find clientele.

He conceded that’s exactly what this firm does.  But defended the letters saying the information was publicly available.  But the letters are designed  to look like a government document.  Is that legal?

“Yes because the representation of the debt is true,” said Leslie Silva, a partner at the Albany law firm, Tully Rinckey.

It’s true.  The person to whom the letter is addressed does indeed owe tax debt.  But what about the threat, “your property will be seized?”

“Those are lawful actions of collections that the government could take,” said Silva.  “So they’re a little shady in how they’re representing that because they can’t take that action.  They’re not capable of that, but the government certainly can.”

So while the letter is deceptive, it is legal.  But that doesn’t mean ATS hasn’t gotten plenty of attention from law enforcers across the country.

The Connecticut Attorney General and the Pennsylvania Department of Revenue call the letters a scam, and Sheriff’s departments in Virginia and Texas have warned citizens not to call the number.

Silva says it’s important to note that a real government document will leave no doubt.  It will clearly give the name of a real government agency and will have a government seal.  And a real letter from the IRS will have a notice number, usually in the upper right-hand corner, that you can search on the IRS website.