Facing significant tax debt can be overwhelming, especially during periods of financial hardship. Thankfully, expert assistance is available for those who owe thousands in back taxes.
Tax relief companies employ knowledgeable professionals who specialize in working with the IRS and state tax authorities to negotiate manageable solutions. These may include setting up payment plans or, in some cases, halting collections through a status known as “currently not collectible.”
Continue reading to explore some of the best tax relief services chosen for their accessibility, affordability, and strong customer satisfaction.
Top 11 Picks for Tax Relief Companies
- Optima Tax Relief – Best for IRS Audit Representation
- SuperMoney – Best for Comparing Multiple Tax Relief Options
- Larson Tax Relief – Best Tax Relief Service Overall
- Anthem Tax Services – Best for State Taxes
- Community Tax Relief – Most Affordable Fees
- Tax Defense Network – Best for Bilingual Services
- Fortress Tax Relief – Best for Large Tax Debt
- Precision Tax – Best for Transparency and Attention
- Liberty Tax – Best for Avoiding Tax Debt in the Future
- Tax Hardship Center – Best for Tax Preparation
- TaxSlayer – Best Tax Relief Software
Optima Tax Relief – Best for IRS Audit Representation
With its exclusive application, Optima emerges as the industry leader in terms of mobile app functionality. This innovative app not only enables users to file tax extensions at no cost but also provides valuable guidance on how to handle IRS notices.
Optima Tax Relief offers a comprehensive range of solutions for various IRS and state tax relief options. They assist clients with everything from creating payment plans to submitting “currently not collectible” filings. The company’s team comprises diverse tax professionals, including enrolled agents, tax attorneys, and CPAs.
One standout feature is Optima’s proprietary app which grants you access to free evaluations for any IRS collection notices you may receive. It assists you in successfully requesting an extension on your tax filing deadline.
In summary, Optima proves itself as the top contender by offering an unrivaled mobile app experience and a vast array of services provided by their knowledgeable staff members who specialize in various areas of taxation expertise.
Read our Optima Tax Relief Services.
Pros
- Proprietary app offers a complimentary assessment of collection notices
- Free consultations
- Well-defined tax resolution process for realistic outcome expectations
Cons
- 15-day money-back guarantee shorter than competitors
SuperMoney – Best for Comparing Multiple Tax Relief Options
SuperMoney stands out as a unique platform that allows taxpayers to compare multiple tax relief companies in one place. Rather than being tied to a single provider, SuperMoney connects you with a range of IRS and state tax relief firms, enabling you to evaluate services, pricing, and success rates side by side.
Their marketplace approach empowers users to make informed decisions by reading verified customer reviews, analyzing service features, and checking ratings for transparency. This saves time and reduces the uncertainty that often comes with choosing a tax relief provider.
SuperMoney also provides educational resources that help taxpayers understand IRS letters, payment plans, wage garnishment issues, and other tax challenges. While they do not directly handle your case, they ensure you are paired with a professional tax relief service that best suits your financial situation.
In summary, SuperMoney is an excellent choice if you want to explore multiple tax relief solutions before committing to one. By offering a transparent marketplace and real user insights, it simplifies the process of finding the right tax professional for your needs.
Pros
- Marketplace model lets you compare multiple providers
- Verified customer reviews and ratings for transparency
- Educational resources to help understand IRS notices
Cons
- SuperMoney does not directly provide tax relief services
Larson Tax Relief – Best Tax Relief Service Overall
With an array of services catering to business tax needs, Larson Tax Relief is the perfect choice for those seeking tax resolution companies in areas such as payroll and federal tax issues, conflicts with revenue officers, and worker classification concerns. Their expertise extends beyond personal IRS tax debt relief to encompass corporate tax aid and help delay or prevent bank levies.
Larson Tax Relief has garnered many positive reviews on customer review websites due to its exceptional business tax services. The company is well-equipped to handle various aspects of business tax preparation, including paperwork about payroll taxes and corporate income taxes. This proves beneficial for small business owners or those managing smaller accounting departments requiring additional support.
Pros
- Can help resolve complex business tax situations like tax liens or accounts receivable levies
- Free consultations provided
Cons
- 15-day guarantee may be insufficient for significant tax debt problems
- No bilingual service available
- Minimum tax debt requirement of $20,000
Anthem Tax Services – Best for State Taxes
Anthem Tax Services provides a range of services, including help with IRS tax debt relief and corporate tax preparation. The company assists clients in applying for various IRS tax debt relief programs, such as offers in compromise (OIC), innocent spouse relief, and achieving a “currently not collectible” status.
What sets Anthem apart from its competitors is its additional support for filing wage garnishment and getting tax levy release. Other companies in the industry rarely offer these services.
One of the standout features of Anthem’s offering is its exceptional money-back guarantee. If they secure no form of resolution from the IRS, whether through payment reduction or debt forgiveness, they’ll refund all of your money. This guarantee doesn’t cover the initial investigation fee. The fee may vary depending on the specifics of your case.
Pros
- Money-back guarantee
- Some customers have reported cases resolved in a week
- Dedicated tax relief services for truck drivers
Cons
- Poor communication on cases that go less than a week
Community Tax Relief – Most Affordable Fees
Community Tax provides complimentary consultations and cost-effective investigation.
The primary focus of Community Tax is IRS tax debt relief, although they offer limited help with state taxes. Like other companies in this field, Community Tax handles various applications, including installment agreements and offers in compromise, but doesn’t provide innocent spouse relief.
One standout feature of Community Tax is their ability to offer bilingual help online and through their representatives. Besides their tax debt relief services, they also provide tax filing, bookkeeping, and business accounting services.
Consultations are free, and the company’s A+ rating with the Better Business Bureau is backed by positive reviews and a quick response time when addressing customer complaints.
Pros
- Bilingual services available
- Affordable initial fees
- Tax planning services for future tax issue prevention
Cons
- Lack of upfront fee details
- Limited options for state tax debt relief
Tax Defense Network – Best for Bilingual Services
Tax Defense Network is the top choice for individuals seeking the best tax relief services in English and Spanish. What sets them apart is their commitment to providing fully bilingual customer support through online platforms and over the phone. Unlike many competitors, Tax Defense Network even accepts low-tax debt, making its services more accessible to a broader range of clients.
Besides offering the standard IRS and state tax debt relief options like payment plans, offers in compromise, and innocent spouse relief, Tax Defense Network also specializes in helping businesses with their tax needs.
They provide close corporate filing services for businesses that need to shut down permanently. Tax Defense Network goes above and beyond by offering comprehensive educational resources that surpass those of other companies. Their resources include helpful tools such as offer-in-compromise calculators and tax withholding calculators.
With its strong emphasis on bilingual support, accessibility for lower amounts of tax debt, specialized business solutions, and extensive educational resources, Tax Defense Network truly stands out among its competitors in tax relief services.
Pros
- Extensive tax debt relief and preparation services
- Abundant tax education resources
- Comprehensive bilingual services
Cons
- Limited money-back guarantee
Fortress Tax Relief – Best for Large Tax Debt
The best tax relief services often charge fees based on a percentage of your total tax debt owed to the IRS. However, this approach can cause a significantly high cost that doesn’t reflect the work required to resolve a case with higher debt. For instance, resolving a $20,000 debt may not require twice the effort compared to resolving a $10,000 debt.
Fortress Tax Relief takes a different approach by providing quotes based on estimated time requirements. The hourly rates for attorneys may vary between $100 and $200 per hour, while EA rates are also typically within this range.
This means that if you have substantial tax debt, you’re likely to pay considerably less compared to other companies that use percentage-based calculations. Obtain multiple quotes from different firms for comparison.
Besides its competitive pricing structure, Fortress Tax Relief also offers exceptional customer service guarantees. If you have an active case with them, their customer service team commits to responding promptly within two business days via phone or email.
Pros
- No percentage-based fee
- Offers a monetary customer service
- Handles all 50 states
Cons
- Not accredited by any industry organizations
- Limited business services
Precision Tax – Best for Transparency and Attention
Precision Tax Relief has emerged as a leading tax relief company, excelling in various areas of our analysis. One standout feature is the company’s 30-day money-back guarantee, among the longest in the industry.
Regarding pricing, Precision adopts a flat-rate fee structure discussed during a complimentary consultation. Your fee will only increase if there are changes to work that were not disclosed during your initial consultation. The payment options offered by Precision are flexible and include a lump-sum payment or an interest-free payment plan.
Precision doesn’t impose a minimum debt requirement on its clients. However, after speaking with their customer service department, we discovered that their base service fee may not be cost-effective for taxpayers who owe less than $10,000 with no other variables. They only accept cases where the potential debt relief justifies their service fees from the client’s perspective.
Pros
- 30-day money-back guarantee
- All-inclusive flat-rate fee
- Multiple customer service channels (phone, text, email, live chat)
- Established since 1967
Cons
- Doesn’t manage standalone state tax debt
- Lacks tax audit representation
- Limited online resources
Liberty Tax – Best for Avoiding Tax Debt in the Future
While Liberty Tax offers a variety of preparation tools to assist individuals in avoiding tax liabilities in the future, its primary focus may not be on tax debt relief services. As the tax relief industry continues to embrace digitalization, and as more people opt to file their returns, many individuals face difficulties.
However, with Liberty Tax’s extensive range of offerings, such as free tax return reviews and online and in-person filing support, they can help you evade debt altogether.
Liberty Tax has partnered with Community Tax, a reputable provider in this field, to ensure reliable tax debt relief services. Community Tax is well-known for its comprehensive selection of programs to resolve federal and state tax debts. These programs cover various aspects like wage garnishment, tax liens, and payroll tax extensions.
Pros
- Fast page loading
- Comprehensive self-employment coverage
- Effective review process
- Outstanding mobile accessibility
Cons
- Below-par user experience
- Limited help content quality
- Insufficient context-sensitive help
- Non-standard navigation elements
Tax Hardship Center – Best For Tax Preparation
Tax Hardship Center has secured a spot on this list as a result of receiving exceptional feedback from customers on the Better Business Bureau (BBB). They specialize in assisting individuals and businesses with various tax-related issues, such as tax liens, penalties, delinquent taxes, payroll taxes, and wage garnishments.
The Tax Hardship Center provides an array of tax preparation services. They can file past and current due taxes for individuals and payroll taxes for businesses.
To further assure their clients’ satisfaction, Tax Hardship Center offers a 14-day money-back guarantee. If you find yourself unsatisfied with their services within the first two weeks, they will refund all fees paid. There’s no set limit to the tax debt they can handle.
Pros
- Free Consultation
- Tax preparation services
- No minimum tax debt requirement
Cons
- 14-day money-back guarantee
TaxSlayer – Best Tax Relief Software
TaxSlayer’s origins can be traced back to 1965 when it was known as Rhodes-Murphy & Co. in Augusta, Georgia. The company has transformed its focus from traditional tax preparation services to creating specialized tax software for professionals in the industry.
Today, TaxSlayer offers a user-friendly platform that enables individuals to file their taxes without leaving the comfort of their own homes.
When faced with accumulating taxes, penalties, and interest, dealing with the IRS can become overwhelming and complex. However, TaxSlayer is dedicated to assisting during this challenging time by offering support and solutions for those burdened by tax debt.
Pros
- DIY tax relief method
- Affordable pricing
- No minimum debt threshold
Cons
- No refunds for program usage
- Learning curve for software
- Mixed and low online ratings
Our Ranking Methodology
We embarked on a thorough process to choose the top tax relief company. Understanding the importance of selecting a reliable tax relief provider, we created an extensive set of criteria considering several crucial aspects. Below is a breakdown of the standards we used to determine the best tax relief services available:
- Reputation and Credibility: When choosing a company, its reputation and credibility in the industry were key factors for me. We considered how long the company had been operating and searched for indications of a successful history. This assessment heavily relied on reviews, testimonials, and ratings from reputable sources.
- Licensing and Accreditation: We gave priority to companies that possessed the proper licenses and were accredited by relevant regulatory organizations. Trustworthy tax resolution companies ought to hold the required licenses for operating within the tax resolution sector. This requirement guaranteed that the company complied with industry regulations and standards.
- Expertise and Qualifications: The company’s staff, comprising tax attorneys, enrolled agents, and certified public accountants, had exceptional qualifications and expertise. We thoroughly assessed the educational background, certifications, and experience of the professionals employed by the company to guarantee their possession of the essential skills required for addressing intricate tax matters.
- Range of Services: We evaluated the array of services provided by every tax relief company. The top-notch companies should offer a wide range of services, such as negotiating with tax authorities, representing clients during IRS audits, reducing penalties, assisting with tax liens and levies, and providing help in settling outstanding taxes through compromise. A diverse selection of services showcases the company’s proficiency in handling different tax issues.
- Customized Solutions: We searched for businesses that provided custom and tailored options to fulfill the distinct requirements of every client. A one-size-fits-all method was not satisfactory. Instead, the company had to evaluate each client’s circumstances individually and create a plan accordingly.
- Transparent Pricing: Ensuring transparency in pricing was of utmost importance to us. We sought out companies that offered straightforward and transparent pricing models, with no hidden costs or unexpected charges. This commitment to transparency gave clients the reassurance that they were receiving a fair deal..
- Customer Service and Communication: Another crucial factor we considered was the company’s customer service. We assessed the level of responsiveness and availability of their representatives. It was of great importance that they communicated promptly and kept clients well-informed throughout the entire process.
- Success Rate: After evaluating the company’s ability to address tax concerns on behalf of its clients, we noted their impressive track record. Their consistently high success rate shows their proficiency in achieving positive results for their clients.
- Ethical Practices: Maintaining ethical conduct was an absolute requirement. We made certain that the best tax relief services upheld ethical standards when interacting with clients and tax authorities. The presence of any past unethical behavior raised concerns.
- Client Satisfaction: We examined client feedback and endorsements to measure overall client contentment. Favorable reviews and testimonials from past clients offered valuable perspectives on the company’s capacity to fulfill its commitments.
Buyer’s Guide
What Is Tax Relief?
Tax debt relief encompasses a variety of strategies and measures aimed at helping individuals either pay their tax liability or reduce it. This term referred to policies that aimed to lessen the tax burden for businesses and individuals. However, nowadays, it’s commonly used to describe payment plans, settlements (offers-in-compromise), and wage garnishments.
While state and federal tax collectors provide similar options for tax relief, the specific regulations may vary depending on your location. It’s crucial to check with your state’s comptroller’s office to determine which options are available.
Negotiating these options directly with the IRS is possible for anyone. However, sometimes seeking professional help proves beneficial.
Tax relief services, or tax resolution companies, possess federal and state law expertise. They can analyze your financial situation and review your documents to identify the best course of action for you. This process typically involves completing paperwork on your behalf and communicating with the IRS.
In some particularly complex cases, these companies may employ tax attorneys who can act as intermediaries during negotiations with the government.
How Do Tax Relief Companies Work?
Tax relief companies collaborate with the IRS on behalf of taxpayers to diminish the amount of outstanding taxes owed. It should be noted that most tasks undertaken by tax relief services can be accomplished by directly engaging with the IRS.
The primary distinction lies because the best tax relief services employ seasoned professionals who possess an extensive knowledge of tax laws. This enables them to navigate intricate cases involving substantial debts more effectively.
For example, if your tax debt primarily stems from missed payments in the previous year, it might be more helpful for you to reach out to the IRS since there’s little these companies can do that you cannot.
However, if your tax debt case involves various bank accounts, assets, multiple years’ worth of unpaid taxes, and other complexities that complicate your financial situation further, a tax relief company can assist you by organizing your documents and determining optimal strategies available. In rare instances, they may even identify oversights made by the IRS and negotiate a reduction in your overall tax bill.
If you owe less than $10,000 in tax debt, it may be more beneficial for you to negotiate directly with the IRS. This is because most tax relief companies require a minimum debt of at least $10,000. If your debt falls below that threshold, it might be wiser to pay the IRS through installments rather than adding to your financial burden by paying for tax relief services.
Everyone’s circumstances are unique. If you believe you need help with your taxes, regardless of the amount owed, many tax relief services offer a complimentary consultation to help get you started on finding a solution.
Common Tax Problems
Tax issues encompass various problems that arise from errors made while filing taxes or neglecting to file altogether. Here are a few explanations of the prevalent tax complications that tax relief firms can assist you with:
Back Taxes
Unpaid taxes arise from the failure to submit tax forms or errors made during the filing process. These unpaid taxes can accumulate interest, leading to a substantial increase in your overall tax debt. To stay informed about the current penalty interest rates, it’s crucial to visit the IRS website as they update this information quarterly.
Using tax preparation software is an effective method to prevent accruing unpaid taxes. If you require help with filing your taxes, we recommend reading our informative article on the top-rated tax software options. This resource will provide valuable guidance and support throughout the entire process.
Wage Garnishments
When the time comes to pay your taxes, the IRS will send you a sequence of collection notifications. If you choose to disregard these notifications for an extended period, the IRS might opt to collect certain portions of your debt by directly deducting them from your wages through garnishment.
Tax Liens
In a manner reminiscent of wage garnishment, the IRS issues a public notice to financial institutions and other parties involved, asserting their authority to collect any profits from the sale of personal property before other creditors can lay claim.
Tax levies
In a more extreme form of a tax lien, known as a tax levy, the IRS is exerting its authority to take possession of your assets to settle your outstanding debt.
Tax audits
If the IRS detects inconsistencies in your tax returns, they may decide to conduct an audit on you. Although audits can happen to anyone, individuals with higher incomes, particularly those earning $10 million or above, have a higher likelihood of being audited.
How Much Do Tax Relief Companies Charge?
Considering the complex nature of tax relief services, the costs vary significantly from case to case. There are two common pricing structures: a percentage-based fee calculated on the total amount owed and flat hourly rates. The most economical choice will depend on the magnitude of your tax debt and the intricacy of your situation.
Many companies that operate on a percentage basis charge between 10% and 15% of your total tax debt. For instance, if you have a $10,000 debt (which is often the minimum requirement set by many companies), expect to pay at least $1,000 to $1,500.
On the contrary, opting for a company that charges a flat hourly rate may prove more cost-effective if you owe a substantial amount but have relatively straightforward circumstances. The average hourly rate for the best tax relief services can range from $240 to $1000.
Certain companies offer individualized pricing for specific services. For example, they might charge a fixed fee of $300 for an essential investigation but raise it up to $1,000 if you wish to pursue particular tax relief options like an offer in compromise (OIC). An OIC allows settling your tax debt for less than what was initially specified.
In conclusion, when seeking the best tax relief services, it’s crucial to weigh different factors such as your overall debt amount and complexity before selecting percentage-based or flat-rate pricing models offered by various companies. Remember, any additional charges associated with specific services like pursuing an OIC option.
It’s crucial to emphasize the significance of requesting comprehensive information from a company before engaging its services. It’s advisable to obtain written quotes, which should encompass potential extra charges and various payment alternatives.
Tax Debt Relief Options
The IRS provides several options for tax debt relief, also available from certain state agencies for local taxes. It’s recommended first to check the IRS website or speak with a representative before seeking help from the best tax relief services to obtain more information about these options.
Remember that most tax resolution companies offered by private companies involve reviewing your case details and determining the best option based on the information they gather. However, note that they don’t have access to exclusive information and cannot guarantee specific outcomes.
If your tax situation is simple, without multiple income sources or complex investments, contact the IRS. The following are some of the tax debt resolution options provided by the IRS:
Offers in Compromise
Offers in compromise provide an opportunity to resolve your tax debt by paying less than the total amount owed. The IRS evaluates your ability to pay, income, expenses, and assets to determine eligibility.
The IRS only considers offers in compromise if it believes that collecting a lower amount is workable “within a reasonable amount of time.” This option isn’t frequently extended for tax settlement purposes.
Innocent Spouse Relief
If your spouse, either current or ex, makes a mistake when filing taxes and leaves out important information, innocent spouse relief can help you avoid any penalties that may come. This option is only available if the IRS determines you had no way of knowing about the errors.
Installment Agreement
If you find yourself unable to make a lump sum payment for your tax debt, the IRS has a solution called an installment agreement or installment plan.
This allows you to pay off your debt over a period. The IRS offers two types of installment agreements: short-term agreements that last 180 days or fewer, and long-term agreements where you make monthly payments until your debt is fully paid.
There’s no specific minimum amount required to apply for an installment agreement. However, if you owe up to $50,000 (for long-term) or $100,000 (for short-term), you can conveniently apply online. This makes it one of the most accessible options for individuals who want to negotiate directly with the IRS.
Penalty Abatement
Often referred to as “first-time penalty abatement,” this tax relief option is frequently accessible for minor tax penalties, such as not making a payment on a single tax return or overlooking a filing deadline. The primary qualification for this form of relief is having no penalties in the past three years, although it’s necessary to have filed or at least requested an extension for your current taxes.
Currently Not Collectible
At present, the designation of not collectible (CNC) status signifies that both you and the IRS acknowledge that you’re unable to pay your taxes, although they remain outstanding.
You may seek CNC status if fulfilling your tax obligations would place an excessive burden on your essential living expenses. This includes situations where it becomes impossible to cover fundamental bills such as utilities, rent, or mortgage payments, or even afford basic groceries due to the financial strain caused by your tax debt.
Once granted CNC status by the IRS, a yearly evaluation of your finances takes place until it’s determined that you can repay your debt. Any future tax refunds received during this period may be allocated towards reducing your outstanding balance while in CNC status.
Other Services Offered by Tax Relief Companies
Audit Defense
Certain allowed tax experts provide a guaranteed service in case your tax filings undergo an audit. Consider it similar to car insurance. You pay the tax professional an extra fee in advance, and they commit to assisting you with any potential tax audits that may arise within a specific time frame, typically up to three years.
Alternatives to Using Tax Debt Relief Companies
Direct Negotiation With the IRS
If your tax debt is relatively small, usually under $10,000, you may negotiate with the IRS on your own. If preparing your tax returns is a simple task, applying for one of the IRS’s programs for relieving tax debt could be more cost-effective than hiring a company for such services.
Tax Relief Lawyers
If your tax debt is relatively small, usually under $10,000, you may negotiate with the IRS on your own. If preparing your tax returns is a simple task, applying for one of the IRS’s programs for relieving tax debt could be more cost-effective than hiring a company for such services.
Tax Debt Relief Programs
The Fresh Start Program, also referred to as the Fresh Start Initiative, is a collection of guidelines designed to enhance accessibility to tax debt relief. Rather than providing a particular form of relief, the initiative reduces the eligibility requirements for various IRS relief programs.
Significant modifications have been made to income calculations used in determining eligibility for offers-in-compromise. The IRS now only considers:
- Future income for offers paid in five or fewer months: One year (previously four years)
- Future income for offers paid in six to 24 months: Two years (previously five years)
It’s imperative that all offers are completely settled within 24 months from the date of acceptance.
Companies specializing in tax debt relief survey the specifics of your situation and assess Fresh Start guidelines to identify suitable relief alternatives that you’re eligible for.
The IRS provides various tax help programs that aim to aid individuals in timely filing their taxes, alongside other benefits.
- IRS telephone assistance
- IRS2GO app
- Tax Counseling for the Elderly (TCE)
- IRS Free File
- Volunteer Income Tax Assistance (VITA)
- Armed Forces Tax Council (AFTC)
- Interactive Tax Assistant (ITA)
- “Where’s my refund?” tool
- IRS.gov
Warning About Tax Relief Scams
Facing the burden of tax debt can be an extremely daunting and anxiety-inducing experience, prompting individuals to explore a range of potential solutions for relief. However, it’s vital to exercise caution, as the Federal Trade Commission (FTC) warns that not all tax relief services claiming to offer tax relief have honest intentions and may not prioritize your best interests.
Tax Debt Relief Companies’ Red Flags
Given that only the IRS has the authority to determine if you’re eligible for relief programs, it’s advisable to avoid any tax relief company that guarantees a reduction in your debt or makes promises that appear too good to be true.
Be cautious of companies that assert your qualification for multiple programs without even assessing your case or claim to resolve your tax debt within a specific timeframe. These claims should immediately raise concerns.
Many deceitful companies neglect to file the paperwork required for relief program applications. Instead, they deceive customers and pocket their money completing no work. According to reports from the FTC, certain companies have even charged customers’ credit cards unauthorized fees long after closing their cases.
When assessing tax relief specialists, it’s important to be aware of certain warning signs.
- Company representatives make guarantees or promises without considering your case details
- Company fails to inquire about specifics of your tax debt situation
- Upfront payment demanded “guaranteed” results
- Company initiates contact through cold calling or unsolicited mail/email
- Company employs delay tactics, repeatedly requesting the same documents
Other IRS-Related Scams
Alongside fraudulent tax relief schemes, stay alert for other scams related to the IRS. One such scam is the IRS text message scam, which was recently highlighted in a press release by the agency. For guidance on avoiding these scams, it’s advisable to seek help from a reputable tax relief company.
A trustworthy tax relief solution will refrain from making specific guarantees and will be upfront about their costs and procedures. Many of these companies also offer complimentary consultations.
To minimize the risk of falling victim to a scam, ensure that you select a company accredited by one or more tax professional organizations such as NATP (National Association of Tax Professionals), NAEA (National Association of Enrolled Agents), and AICPA (Association of International Certified Professional Accountants). These affiliations serve as indicators of legitimacy.
How to Avoid Tax Relief Scams
Regrettably, fraudulent activities are prevalent within the tax relief sector. Many scams require a substantial initial payment, provide minimal help, and ultimately worsen your financial situation. Here are some tips to steer clear of falling victim to such schemes.
Requesting Full Payment Upfront
If a tax resolution company requests payment for all fees before a consultation, it’s advisable to be cautious. This shows their primary motive is financial gain rather than providing help.
Not Offering a Money-Back Guarantee
If a scam lacks a money-back guarantee, it’s a clear indicator. Most tax relief services provide this offer to instill confidence in their services.
Claiming Unrealistic Services
If a company is making exaggerated statements, it should be assumed that it’s not trustworthy. Such claims might include guarantees to eliminate your tax obligations or remove all of your tax debt. While the best tax relief services offer some help and potentially lessen your tax burden, they cannot eradicate all of your outstanding taxes.
FAQs
Are Tax Relief Companies Worth It?
Certainly, tax relief companies that provide the best services are definitely worth the fees they charge. This is because they have a team of licensed professionals who possess the expertise to negotiate with the IRS on your behalf. Their primary goal is to assist you in qualifying for a relief program that you may not be aware of at present.
The leading firms also offer legal support, ensuring protection against any aggressive actions taken by the IRS. They provide valuable tax preparation tools to help prevent future debt issues. If for any reason you don’t achieve tax relief, these companies even offer a money-back guarantee for your peace of mind.
How Much Will the IRS Usually Settle For?
The IRS will determine an amount that you can realistically afford to pay and settle. You may still be required to repay the entire debt, but it could be at a later time or through an installment plan. Alternatively, if you meet the criteria for programs such as spouse relief or offers in compromise, the IRS may reduce your debt.
Does Tax Debt Relief Hurt Your Credit?
Tax resolution company doesn’t have a negative impact on your credit score since the IRS doesn’t provide information to credit bureaus when you establish payment plans. Your credit may be affected if you cannot make payments, as the IRS can initiate reports that could harm your score.
However, as long as you fulfill your obligations according to the agreement, there should be no detrimental effect on your credit score. It’s possible for your score to remain unchanged or even improve during this process.
How Much Does a Tax Relief Company Cost?
The best tax relief services provide a complimentary consultation and subsequently impose an initial examination fee ranging from $295 to $500 to comprehend your financial obligations.
Following the investigation, the total expenses incurred will vary based on the intricacy of your case and the legal services necessary. The estimated cost for the entire process typically falls between $1,700 and $6,000.
How Do I Get My IRS Debt Forgiven?
If you have outstanding taxes amounting to a minimum of $10,000 and can show your inability to repay the debt within a reasonable timeframe, you may be eligible for either an offer in compromise or the IRS Tax Forgiveness program. Upon qualification, the IRS has the authority to reduce your debt.
Bottom Line
If you’re struggling to repay tax debt owed to the IRS, working with a tax relief service may be a smart option. These companies have the experience and resources to walk you through your repayment options, help you apply for IRS programs, and negotiate on your behalf to potentially reduce the total amount you owe.
While their services often come with a significant fee, many taxpayers find the cost worthwhile for the expert guidance, reduced stress, and peace of mind they receive in return. To take the first step toward resolving your tax issues, consider scheduling a free consultation with one of the trusted providers from our recommended list.
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