What You Need to Know about Omni Financial

On my current resume I introduce my former employer by saying, "Omni Financial is a tax consulting and business turnaround firm that specializes in helping small businesses and individuals to achieve compliance and negotiate settlements with the Internal Revenue Service and state taxing authorities."

I initially wrote about leaving Omni here, and I promised here to talk about why Omni Financial is a bad company, what my complaints were, and alternatives to IRS 941 tax problems other than the borderline scam that is Omni Financial. I see a fairly steady stream of hits - probably three to five a week - for search terms like Omni Financial sucks, Omni Financial ripoff, Omni Financial complaints, Omni Financial taxes, Omni Financial reviews, and other types of similar inquiries about Omni Financial.

Today I got my first email asking for more information about why I am so disgruntled. I tried to give a response that I felt was comprehensive and filled with enough detail of the good and bad that the person could make their own decision. Since I have been promising to detail my gripes, I am just going to paste my response in its entirety. My response focuses almost exclusively on concerns from the client's point of view. I could have rambled on even more extensively detailing what it is actually like to work for the firm. Unfortunately, my experiences in relating these types of tales from the work place are always met by complete and utter disbelief. No one believes that you could actually run a company like that and not only survive but thrive. But if there is one thing that this world is full of, it is former employees of Omni Financial. We all have war stories that are so fantastic you'd think they came straight from John Kerry.

Received:

I ran across your page dealing with your dislike for Omni Financial. My husband owns a small business that is in trouble and has been considering using Omni to help with his tax settlement.

Could you give me any insight into the company and/or procedure?

Thanks, (name deleted)

Sent:

(name deleted),

First of all, I am sorry to hear about the predicament that your business has fallen into. Don't worry. You will be able to find a resolution be it through Omni, another consulting firm, or on your own. In my time at Omni I learned that the IRS can be more accommodating than many people realize.

There are a lot of problems with Omni Financial. It is my belief that the root cause of their problems lies in how they treat their employees. The environment causes a tremendous amount of turnover. The result of that turnover is that there is an extreme variance in the knowledge and experience of the associates and their staff (called para-associates or simply, paras). If your tax debt is less than $100,000 it is extremely likely that your case would be assigned to a more junior associate who may or may not yet have had a chance to learn the ins and outs of the business.

There are a number of associates at Omni who are honest and will truly look out for your best interests. However, I do not believe that is the general case. In general, the associates are concerned only with keeping their jobs and making lots of money. The primary way that the associates and the firm itself make money is not by bringing on new clients such as yourself. Rather the money is made by re-writing existing clients. To the best of my knowledge not one single client has ever come to Omni and had their case resolved for the initial quote. The firm will do everything in its power to ensure that it gets as much money from you as you can possibly afford to pay.

As a fairly well-educated fellow with an MBA, I certainly do not have a general problem with a company trying to maximize its revenue stream. It is the methods and deception that Omni uses that make me so anti-Omni. Once a client is brought on board and they go through the initial take-in or "turn-over" call with the assigned associate, the associate will begin working to determine the exact amount that you owe and your precise standing with the IRS. If the amount you owe differs significantly from what you initially told the sales rep, the associate may use it as an excuse to re-write you for more money because this supposedly makes your case more complicated (it does not).

The sales rep has probably tried to sell you on deal under which the firm will endeavor to secure you a payment plan and a subsequent waiver of incurred penalties. They may even tell you that they can get the interest wiped away (they cannot under this type of agreement). Once you are a client and Omni has established your total debt and standing with the IRS, the associate - in about 8 cases out of 10 - will then try to up sell you on a different resolution plan. This may be the offer-in-compromise program (pennies on the dollar you'll often hear (though you may not hear that it can be 95 pennies on the dollar)) or they may suggest that you switch to a new type of business entity (sole proprietorship to or from a corporation or partnership or LLC).

These changes in strategy in many cases truly are in the client's best interest, but Omni is going to charge you a lot of money for it. If you miss a deadline that Omni sets for you to provide them information because you are busy running your lives and your business, the associate will harangue you for not being committed to the strategy at hand. This of course will cost you more money. The company teaches dozens of different reasons to their associates on things that clients do that are cause to charge them more money. If there's one thing I want to express here is that whatever amount you have been quoted will not be enough.

One thing you probably can count on from Omni is having lots of phone conversations with them. The associates are reviewed on three key metrics: the amount of money they can bring in from existing clients each month (on which they are paid a hefty commission), the amount of time they spend on the phone each day, and the number of billable hours they have each day. Notice that the firm does not necessarily care whether or not the associates achieve successful outcomes for their clients. The phone time requirement means that the associate will be on the phone with you at least once a week just to check in and see how things are going. This is nice and it is one area of the business where I would suggest that Omni may actually excel: relationship building. The problem is that the associate charges you $150 - $175 an hour just to call and chat and make sure his/her phone stats are good. On the billable hour metric I have even more concerns about how the firm operates its business. The flow of a client's case has a number of very regular steps that do not vary across clients. Unfortunately, you will not benefit from the experience that the firm has for doing things over and over. Time spent working on your case is billed against your retainer not as real-time work but at a rate that they deem reasonable.

A great example is the appeal of the Final Notice of Intent to Levy that the IRS issues. Before I was promoted to associate, I regularly prepared these appeals for my associate's clients. A long appeal might take me 30 minutes to type, print, save, and prepare for my associates' signature. I was instructed to bill 2 hours for myself (at $125/hour) and an additional hour for my associate (at $175/hour). My associate did nothing for this billing other than to sign and date the bottom of the form. In that way we were able to maintain our billable hours, and we were able to quickly burn down the clients' retainer balances so that we could hit them up for more money. You can bet too that when negotiations with the IRS are approaching either finalization or a critical point that that is the time you will run out of retainer money and will have to re-up if you want to see your case through to conclusion. This was the point that ultimately sickened me to the point where I had to resign my position: we strategically plotted to get clients to where they needed us the most and then threatened to cut them off unless they paid more. I heard of numerous associates who made the claim to clients that the IRS would not look well on the fact that a client dumped or changed their power of attorney at a critical point. I do not believe this is actually true - though it could vary from Revenue Officer to Revenue Officer, I suppose.

One final point that I need to point out is that I believe the firm engages in and promotes systematic forgery. I'm not a lawyer so I'm not sure that forgery is the precise term, but the actions are reprehensible. In order to receive information and negotiate on your behalf, the firm must maintain powers of attorney and various other authorization forms. If you have already spoken to a sales rep, you have probably already received a copy of these forms. The sales rep no doubt told you that he would walk through where to sign these forms and what to do with them. You would be instructed to leave the forms blanks and to just sign them on the bottom or on page two where indicated and to fax them back. Once they have those forms they will quite literally cut and paste your signature on to other powers of attorney (POA) that they have filled out. You will never know how many types of POA's are out there with your signature. To be fair, I am unaware of any instance where an employee cut and pasted a signature for an authorization that the client probably didn't desire the firm to have. But they do not go about it the proper way.

There probably are cases where you may want to consider Omni Financial. If you have a very large debt ($250,000 or more) or if you want to fight the debt as aggressively as possible, costs-be-damned, then Omni might work for you especially if you can get your case assigned to one of their more aggressive associates. I would still counsel caution if this is your case. I witnessed associates that were so aggressive that they produced financial documents for submission to the state and federal taxing authorities that had only the slimmest ties to reality. It is the client who signs these documents under penalty of perjury. Be careful and make sure you understand and can document anything you sign.

Keep in mind I am a former employee. I obviously have my prejudices against this company, but everything that I have told you here is true or was true when I left the firm at the end of March. I also have at least one friend who still works there (although from what I hear, turnover is still critically out of control and I'm not actually sure who is still there that I used to know). Omni is not 100% evil, but I'd put it somewhere in the mid 90's. I honestly believe you could be better served by going a different route.

As far as which different route, I will offer a few suggestions. If you do want to stick with Omni and would like a recommendation for an associate that you can trust, let me know. It was my experience that if a client says they will come on board but only if they can work with so-and-so, the firm will make it happen.

Another option is to consult an area CPA. Look in the phone book under taxes and call and ask if they have experience working out payment arrangements with the IRS. Ask if they are familiar with strategies such as the offer-in-compromise program and business entity changes. I would advise you to stay away from a CPA without these types of specific experiences as it is really quite a different (just different, not harder) process than tax preparation or audit defense. I would also advise you to stay away from anyone who pushes the offer-in-compromise or pennies-on-the-dollar settlement program. This is a legitimate way for some people to settle their tax debts, but the IRS has very rigorous standards and guidelines as to who can participate and how much exactly they will have to pay. Anyone who pushes this on you with out a complete understanding of your business and personal assets and liabilities is going to disappoint you. They may very well prepare an offer in compromise for you, but the IRS will never accept it if it doesn't meet the criteria.

Another option is to work directly with the IRS. If a Revenue Officer (RO) has been assigned to your case, it is generally his or her responsibility to see this through to resolution. I found that many RO's can be very pleasant to work with. If you are open and honest and straightforward with wanting to resolve your case, you can many times achieve the same resolution that Omni would without spending lots of money. This is particularly true when it comes to the point of requesting an abatement or waiver of penalties you incurred. In order to request a penalty abatement (generally after you have already paid the debt and penalties or secured a payment plan) you can just write up your case yourself. Tell the IRS every little thing that happened that caused you to fall behind and not pay your taxes. Then provide supporting attachments to prove as much of the story as you can.

Finally, I know of another tax consulting firm that does the exact same business as Omni Financial. It was started by and is staffed by a whole bunch of folks (both sales people and associates) who left Omni for reasons similar to mine. One of the principles is the brother to a gentleman who was formerly a manager at Omni. His brother from Omni told him what a great business it was but to stay the heck away from Omni. The company is also based here in Colorado and seems dedicated to doing this service the right (honest) way. They will let you know up front whether it is worth your time and money to sign up with them. This is a company where I now know a number of people who work and who offered me a job. I declined that job in part because of the significantly longer commute it would have meant for me as well as compensation concerns but not in any way due to ethical concerns. I don't want it to seem like I am pushing this other company as I do not truly have enough knowledge to personally recommend them, so I won't give you their name and number unless you request it but will happily give you names and numbers upon request.

Thank you for responding to my blog. You are the first person that has written to me on this particular topic. In all likelihood I will end up using my response here as an outline for a post detailing my issues with my former employer. I have been meaning to post these details for a long time, but I haven't been able to sit down and take the time to organize my thoughts.

If you have any further questions or concerns or want clarification on any of my terms or arguments or complaints or want advice on penalty abatement arguments or whatever, please don't hesitate to email me. I'm not always this quick to respond, but I'll try. I wish you and your husband the best of luck in resolving your problem. Don't give up or lose hope. You can work this out.

Good luck!

Jonathan Harrington
Denver, Colorado

So that's my case against Omni Financial. Although I stand by my statement, I would ask that this post not be used to promote the products and services of another firm. Like I said, I don't have the complete set of personal experiences to know who's better and who's worse. On the other hand, if you have a blog or a website of your own and would like to provide a hyperlink to this post under the words Omni Financial, well that would be great as it will help to ensure that search engines can assist consumers in finding out the information they need prior to making a purchase.

Jonathan 8/24/2004 04:30:00 PM