Tax relief companies are sometimes thought of as having a bad reputation because of customer complaints about false promises, high fees, and even blatant scams. While it's absolutely true that the tax relief industry has some negative players, there are also many reputable tax relief companies with a proven track record of success. The answer to this question really depends on the company you use for your tax debt relief service. Yes, there are legitimate tax relief companies that can help you reduce your tax debt or sign up for an affordable repayment plan.
However, there are also a lot of fraudulent companies. Do some research before choosing a tax debt relief company that represents you. Tax relief may allow you to divide your debt into payments or reduce the amount of taxes you pay to the government. No, the tax relief won't kill your tax bill and may cost you more in the long run, but it could make paying what you owe the federal government much more manageable.
If you're not prepared to pay fees for the help of tax professionals, you can work directly with the IRS to apply for current non-collectible status, establish an installment plan, or apply for any other assistance program. In some cases, having a tax professional act on your behalf may reduce the likelihood that the IRS will take even more severe measures, such as the seizure of your property. A professional tax relief company can facilitate negotiations to ensure that you get the best terms available. A good tax debt relief company will have a licensed tax professional who will analyze your specific tax debt situation and determine the best solution or combination of solutions to help you pay off your tax debt.
While it's important to be careful and avoid scammers, there are legitimate tax relief companies that offer real value. Tax relief firms can also help you qualify for the currently non-collective status, suspending any collection efforts by the IRS at least temporarily. As with installment agreements, the current non-collectible (CNC) status will not reduce any of your tax bills, but will serve as a temporary restriction for the IRS. Tax relief companies regularly use the Internet, radio and television to advertise their services to struggling taxpayers.
If you hire an accredited tax relief company to work on your behalf, you may contact the IRS to try to negotiate a transaction offer, an installment agreement, or a reduction in penalties or interest. Known as tax settlement firms, these entities claim that they can drastically reduce or eliminate what the customer owes to the IRS. Some tax relief companies attract customers by stating that they can reduce customer debts by filing a compromise offer (OIC) with the IRS. In addition, before hiring a tax relief company to try to settle your bills, check directly with the IRS to see if you qualify for their commitment offering program (OIC).
During your consultation, a real tax professional examines your case and presents you with your options for tax debt relief; you won't talk to a seller. Some law and accounting firms also have tax relief departments that help clients facing audits and tax debt problems. If you owe less than that amount, it can be difficult to find a tax debt relief company that is willing to hire you as a customer.