While these programs can eliminate penalties or interest, you still have to pay taxes. Unfortunately, the industry is plagued by scams and bad business practices. Disreputable companies lure customers with false promises while charging high fees. Still, legitimate tax settlement firms exist.
These companies are honest about whether you can benefit from their services and charge reasonable rates that are disclosed in advance. 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. In a perfect world, you would always pay off all your tax debt on time and you wouldn't need tax breaks. However, things don't always work that way in the real world. If you're struggling to pay your tax debts, it may be worth seeking expert help.
But do tax relief companies really work? Yes, legitimate tax professionals can help you reduce your tax debt or sign up for an affordable payment plan. However, there are companies that will simply keep their money without adding much value. Working with a tax relief company usually starts with a free consultation. You'll talk to a representative, give them details about your tax problems, and the company will quickly analyze your situation to determine which tax relief service can help you.
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. When it comes to tax debt relief companies, you can avoid a scam by making sure to ask if the company has licensed tax attorneys on staff and if it has a money-back guarantee. Since only the IRS can determine if you qualify for relief programs, you should avoid any tax relief company that promises to reduce your debt or that makes statements that seem too good to be true. The IRS Office of Professional Responsibility points to questionable practices in the tax debt resolution industry.
While it's entirely possible to negotiate common tax debt problems yourself directly with the IRS, consulting a professional can often provide greater peace of mind. In addition to tax debt relief, Precision offers assistance in securing wage garnishment and tax releases, which can provide a significant amount of financial relief, if granted by the IRS. Before contacting tax relief companies, it's always a good idea to visit the IRS website or talk to a representative by phone to learn more about these options. While results are never guaranteed, these companies can certainly help with complicated tax debt problems.
Known as tax settlement firms, these entities claim that they can drastically reduce or eliminate what the customer owes to the IRS. The Federal Trade Commission has even received complaints that some tax relief companies have made unauthorized charges in addition to the initial fees. Individual and business tax preparation services are also available to customers, to avoid tax debt problems in the first place. Other companies will send a consumer forms to request a “transaction offer” from the IRS, which the company knows will be rejected due to strict IRS guidelines for debt forgiveness under that program (see below).
A more drastic variation on a tax levy, a tax levy, means that the IRS is asserting its legal right to seize your property to pay your debt. All Community Tax customers enjoy a service guarantee that reimburses you for your investigation fee if the company determines that it cannot help you resolve your tax debts. Things like tax deductions and programs like the child tax credit are among the many tax relief options available. Or you can impose a property tax, in which case you can take the property and sell it to recover the taxes you owe to the government.