Congratulations to the Federal Trade Commission for its latest action that resulted in the closing of a company that was taking advantage of consumers looking for relief from their tax debts.

The agency is giving back $16 million in refunds to more than 18,000 customers of American Tax Relief, which advertised heavily on TV, radio and the Internet. The company promised taxpayers overwhelmed with debts to the Internal Revenue Service that it could significantly reduce their burden.

American Tax Relief was selling a lot of hope. Unfortunately, desperate people will do desperate things. In its complaint, the FTC said the company made claims that it could remove tax liens and stop wage garnishments, bank and tax levies, property seizures and “unbearable monthly payments.” At one point, the company’s website boasted: “The IRS is currently accepting a fraction of back taxes owed … for those who qualify. The IRS is allowing the people with delinquent tax liabilities a ONE-TIME opportunity to settle the debt ONCE AND FOR ALL. But at the same time, the IRS does not advertise, promote or even voluntarily suggest this program.”

A federal judge, at the request of the FTC, finally closed down the national operation. American Tax Relief agreed to the terms of the settlement without admitting any guilt or denying any of the allegations in the complaint.

On consumeraffairs.com dozens of people complained about American Tax Relief and the thousands of dollars they paid seeking tax-debt relief. The FTC said the company raked in more than $100 million by charging people up-front fees ranging from about $3,200 to $25,000.

“They charged me $9,500.00 to ‘reduce’ my tax debt to pennies on the dollar,” one woman from Columbus, Ohio, wrote in 2010. “They did absolutely nothing for me.”

Another customer from New York wrote:” I saw their ad in the paper … They immediately told me they could reduce my tax debt, which was $38,000, to $3,000 or $4,000 then [I] sent them $4,900 to start the process. I had to keep sending them papers they requested over and over. IRS then contacted them. IRS claims they never returned their phone calls … I tried calling American Tax Relief and they never returned my calls. In my opinion, this company rips people off and does absolutely nothing for you but keep your money. It is a travesty and an injustice.”

Under the settlement with the FTC, the company and its owners had to turn over millions of dollars in assets, including bank accounts, jewelry, and a Ferrari. Even the parents of the defendants, who were not charged in the scheme but received money from it, had to give up money in bank accounts, jewelry, a Beverly Hills residence and a Los Angeles condominium.

But if you shelled out money to American Tax Relief, don’t expect a full refund. The FTC says former customers will get on average 16 percent of the amount of money they lost. Often, even though authorities can take action against a company, much of the money is already gone. So there isn’t enough to make all victims whole.

If you get a check, you will need to cash it within 60 days of the mailing date. If you have questions or need more information about the settlement with American Tax Relief, call the administrator, Gilardi &Co., at 877-430-3699 or go to www.FTC.gov/refunds. Scroll to the end of the page and click on the link for “Recent FTC Cases Resulting in Refunds.”

Often what the ads such as American Tax Relief ran don’t disclose is that the claims of debt-relief depend on your being approved for the IRS’ Offer in Compromise program, or OIC, in which the agency agrees to accept less than your full tax payment under certain circumstances.

And the certain circumstances have to be dreadful. To qualify for an OIC, you have to show that you can’t pay your full tax liability because it will create a severe financial hardship. The IRS will take a detailed look at your income and assets to determine your ability to pay.

The IRS says that absent special circumstances, an offer will not be accepted if the agency thinks your debt can be paid in full as a lump sum or through an installment agreement. The agency generally approves an OIC when the amount offered represents the most it can expect to collect within a reasonable period.

I hope what’s happened in this case serves as a reminder to be skeptical of tax relief claims. Save your money for your tax debt.

(c) 2014, Washington Post Writers Group