Part 1: The Ultimate Guide to Tax Relief

This video is the first in a four-part series detailing the basics of tax relief and addressing some common terms that may be helpful for you to know as you navigate the IRS and your own tax situation.

We’ve also answered the following tax relief questions:

• What is tax relief?
• What makes a good candidate for tax relief? 
• What are some common tax relief myths?

What is tax relief?

Simply put, tax relief is any help you receive from a company or nonprofit to help ensure you are in compliance with the IRS rules and regulations related to taxes, or reduce or alleviate your tax burden or tax debt.

Sometimes, this help will come in the form of consulting or personalized information as to what steps you need to take to make things right with the IRS.

Other times, this help will be more in depth, such as a company representing you before the IRS in a negotiation or tax audit.

What makes a good candidate for tax relief?

A good candidate for tax relief typically has unresolved tax debt with the IRS that has become unmanageable. This could mean you have back taxes you can’t afford to pay, or you have received notices from the IRS that you are at risk of further action if you don’t settle your tax debt.

According to Wade Schlosser, CEO and Founder of Solvable.com, “in most cases, tax relief companies want to work with taxpayers – including businesses or individuals – who owe $10,000 or more in tax debt. But, there are many companies out there who will help you if you have $5,000 in tax debt or even less.”

A tax relief company will do a deep dive into your current tax situation and help you make a game plan to settle or resolve your tax issue. Thus, if at any point you feel your tax situation is more than you can handle yourself, you are a good candidate for a tax relief company.

What are some common tax relief myths?

Part of understanding tax relief is debunking any incorrect information you might think you know about it. We reached out to some tax relief industry experts for help.

Myth: Once you hire a tax relief company, the company will do everything and the taxpayer doesn’t have to do anything. 

Fact: The taxpayers will have to work on getting or staying current with their taxes and file outstanding returns. They also have to provide the paperwork that the IRS will be asking for, such as proof of income and expenses and proof of tax filing or payments.

Source: Jennifer from Omni Financial

Myth: It’s impossible to get relief if you file your return late.

Fact: It’s harder to get tax relief from the IRS if you have filed late. However, it’s still possible to get relief even if you have several years of unfiled returns. You need a good representative for that, though. Get ready for some late filing penalties, too.

Source: Dmytro from PDFLiner

Myth: You have to owe more than $10,000 in taxes to get help.

Fact: While some tax debt relief companies only work with taxpayers owing more than that amount, many can help anyone, even if you have a few thousand dollars worth of tax debt. 

Source: Wade from Solveable.com

Myth: You can’t qualify for tax relief if you have a source of income.

Fact: If you cannot afford to pay your living expenses and pay down your tax debt at the same time, you may qualify for tax relief. And even if you don’t qualify for full forgiveness of your debt or what’s known as “currently not collectible” status, you may qualify for a partial pay installment agreement or other arrangement that will allow you to pay your tax debt over time with reduced penalties.

Source: Wade from Solveable.com

Myth: Tax debt relief companies are scams or fly-by-night operations that take your money and run.

Fact: There are many reputable tax firms run by certified public accountants, tax attorneys, and IRS enrolled agents that help millions of taxpayers get out of debt.

Source: Wade from Solveable.com

The bottom line

Tax relief may have some complicated ins and outs, but knowing the basics can give you confidence to communicate with a tax professional about your situation and what you need. Check out the rest of the videos in our tax relief series to learn more.