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. Unfortunately, the industry is plagued by scams and bad business practices. Disreputable companies lure customers with false promises while charging steep fees.
Still, legitimate tax settlement firms exist. These companies are honest about whether you can benefit from their services and charge reasonable rates, which 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. Tax relief companies regularly use the Internet, radio and television to advertise their services to struggling taxpayers. Basically, tax relief companies work by negotiating with the IRS on your behalf for a fee.
That fee can run into the thousands of dollars, with no guarantee that they will be more successful than if you negotiated with the IRS on your own. 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. This type of tax debt relief applies when your current or former spouse makes a mistake or omission when filing your taxes.
Given the complicated nature of tax relief services, it can be safely said that the costs vary greatly from case to case. Tax problems refer to a series of problems that are due to errors made during filing or simply the failure to file a tax return. In reality, this is virtually impossible to do, and the IRS rarely accepts a real reduction in the amount of taxes owed. In addition to tax debt relief services, Community Tax also offers tax filing, accounting and business accounting services.
You pay the tax professional an additional amount up front and they commit to helping you resolve any tax audits that may arise in the future, usually up to three years. The company will then contact the IRS or your state's tax authority to obtain updated account records. Most tax settlement firms promise to send their experts to the IRS to negotiate on behalf of the client, where they can presumably persuade the agency to accept a much smaller amount, often cents on the dollar. The following guide to tax breaks includes explanations of the basic concepts you need to know, as well as information on the many tax relief programs that tax relief companies can help you apply for.
My colleague Robin Scott-Hutchens, EA, wrote an excellent article in which he described what the IRS can confiscate when back taxes are owed. Tax relief may allow you to divide your debt into payments or reduce the amount of taxes you pay to the government. And, if you think you might be a victim of tax identity fraud, see What to do if you're a victim of tax identity theft. These firms work with the IRS on your behalf to resolve back taxes and can help you pay your debts and minimize the financial penalties that come with them.
Most people qualify for some form of tax debt relief, but not everyone qualifies for the “cents on the dollar” relief that is so often announced. The concept of tax relief includes a number of government policies and initiatives designed to reduce the tax burden on individuals and businesses. All Community Tax customers enjoy a service guarantee that reimburses the investigation fee if the company determines that it cannot help you resolve your tax debts. .