The term “Tax Relief” came from the need to address IRS and state tax liability, (unpaid balance) and compliance issues impacting US individual and business taxpayers. The primary sources of these issues are income and payroll taxes. The programs that the IRS and many states have developed to address tax balance are often complex and understanding the requirements are a barrier for most people impacted. Tax Relief refers to the programs and professional services sought by taxpayers to assist them with navigating these complex issues.

Some key factors in choosing the right firm to help-

• Do they specialize in tax relief services? Although the taxing authorities require a representative to be licensed as a CPA, IRS Enrolled Agent or Attorney, it doesn’t mean that simply having that license qualifies someone to provide these services. Tax relief is a specialized area of tax law, so making sure the firm or professional you choose is experienced is important for getting the best outcome.
• Is the firm owned by licensed tax professionals? Many tax relief companies have popped up to take advantage of the demand for these services, but their business practices may not be closely tied to the ethical and legal compliance guidelines required by professional licensure. For firms that are not governed by the discipline of licensed ownership, there can be a temptation to put sales goals and shortcuts before ethical business practices.
• What is their reputation? This is a tricky one because all companies that promote themselves online put information out there that they want you to see and leave out the stuff they don’t. That’s why using independent and objective sources is key. Look at the Better Business Bureau, Ripoff Report, Pissed Consumer and Complaint Boards to see what people are saying about their experience with a company. Beware of sources such as “Best of” sites where companies have paid to be listed in a favorable manner.

The best representation has more to do with experience and performance than with the type of license. Tax Attorney’s can represent a taxpayer in Federal Tax Court, but the reality is that very few cases involving back taxes end up there. Almost all cases are resolved through the administrative process within the IRS, so it is important to find a representative that is not only knowledgeable of the Internal Revenue Manual and IRS Tax Code, but also practiced at applying the rules with the IRS. Being able to speak to your potential representative versus a sales person is a key part of determining your best choice.

The cost for tax relief services can vary from a few hundred dollars to thousands and is impacted by the number and type of services required to resolve your case. It is also different depending on who you choose as your representative and their approach for billing you. Some will charge a flat fee that includes all required services to complete your case. The benefit of this approach is that you know everything the company is doing for you and the full cost before you pay them anything. The key with this approach is to be sure that the quote involves all services required to complete your case and that the company has all professionals on staff to complete the work. Some tax relief companies offer initial fees for “Compliance Checks” and “Investigations.” The fee is in exchange for calling the IRS to help them zero in on the specifics of your tax issue. They then follow-up to quote you based on what they found. This approach means paying 100s of dollars in advance of knowing the overall cost or whether the company can help you. Your initial consultation is most often with a commissioned sales representative instead of a licensed tax professional. The most traditional approach is to be charged a retainer and then be billed by the hour. The risk of this approach is that you can not be certain of the overall cost of your case and there is an incentive to prolong the process.

When most people use the term Tax Settlement, they are referring to a program through the IRS called the Offer in Compromise (OIC). If you meet certain requirements, the IRS will accept less than your assessed balance. Only the IRS can make the final determination, but a qualified tax relief professional can assess with reasonable certainty whether your situation will qualify for the program. Our CPAs and EAs have historically been more than 94% accurate in determining whether a client will qualify for the program. Successful OICs average a savings of 97% of the assessed balance owed.

A reputable tax relief company will take you through a full assessment of your situation with a licensed tax relief professional. This allows them to determine how your situation will align with the programs available and the scope of services required to maximize your outcome. Done correctly, the result will be a clear expectation of what can be achieved. Companies that are doing a good job of this should be offering a money back guarantee, a service guarantee that promises their services will be completed and a detailed contract that outlines the work discussed. Avoid companies that request your payment information and leave the scope of work and fee open ended.