Best Tax Relief Companies

Types of tax professionals

The almost inhuman lack of sympathy for your financial situation from some IRS officials is contrasted by the quality of care you'll get from tax professionals with the best tax relief companies.

The first attribute you should look for in a tax relief company is qualified tax experts and caring tax professionals. Enrolled agents are federally licensed tax professionals who hold the highest credential awarded by the IRS. They may represent any taxpayer on any matter before the IRS.

Whether they're enrolled agents, certified public accountants (CPAs), or tax attorneys, tax professionals will also be authorized to represent clients before the IRS; however, both are regulated on the state level. CPAs cover a wide range of accounting needs while tax attorneys specialize in tax law and can represent clients in tax court. Enrolled agents also offer tax representation to individuals before the IRS but not in tax court.

Types of tax problems

Potential tax relief customers should research what type of tax liability and IRS problems each company resolves. Many companies represent clients during tax audits (thorough examinations of tax returns), while others specialize in different tax resolution services.

Because each taxpayer or debtor has a unique tax problem, your tax company should be uniquely qualified to represent you and resolve your specific tax issues. Most tax relief programs offer assistance with all tax issues, though some may have more specialized experience with certain situations. These are some of the most prevalent tax issues that tax relief companies work with:

• Back taxes—These have likely accrued penalties over the course of time since their due date. These taxes involve the most common form of tax debt, because oftentimes the taxpayer does not currently have the money to pay their tax obligations.
• Tax liens—A tax lien involves a public notice declaring the IRS' right to claim earnings before other creditors when a piece of property is sold. To get rid of a federal tax lien, taxpayers must qualify for penalty abatement. Tax relief companies can navigate the process to remove liens for clients.
• Tax levy—This is the IRS' legal right to seize property for unpaid taxes. A tax levy represents a more drastic measure than a tax lien.
• Wage garnishment—The IRS collects owed taxes directly from a taxpayer's paycheck.
• Tax audit—An IRS tax audit involves the IRS' decision to look more closely at your tax return in order to discover discrepancies and inaccuracies.
• Other issues—Most tax relief companies may also assist with innocent spouse relief, bookkeeping, and business taxes.

None of these tax issues is fun to deal with, especially wage garnishments. Working directly with the IRS or with a tax relief company can help you resolve these issues, pay your tax debt, and move on with your life.

Types of tax solutions

The best tax relief companies should have multiple solutions to possible IRS problems. Because of the complexity of tax law, tax code, and regulations, most taxpayers are unfamiliar with possible solutions to the most common debt issues. The IRS has a Fresh Start program for debt forgiveness. It offers options for federal tax relief, like stopping penalties, settling debt, and paying your tax debt over time.

• Offer in compromise—An offer in compromise is debt settlement for taxes. It allows taxpayers to settle with the IRS for less than they owe. It is only granted when the taxpayer is unable to pay the full tax debt and can prove inability to pay. An offer in compromise is sometimes referred to as an OIC program.
• Installment agreement—This allows taxpayers to set up a payment plan through which they pay their tax debt in monthly payments over an extended period of time. This can take the form of a streamline, partial pay, or traditional installment agreement. Installment agreements are more common because monthly payment plans are easier to negotiate than other agreements.
• Penalty abatement—You can reduce or remove penalties if you qualify for a penalty abatement. If you believe that you have been unfairly penalized by the IRS, you must also prove that you had reasonable cause (for filing late or for not filing at all) in order to qualify. Under special circumstances—in which first-time debtors may request the reduction of some or all tax penalties—a taxpayer may apply for a first-time abatement (FTA) for a single tax period. Other possible reasons for abatement requests include IRS errors and bad oral or written advice from the IRS.
• Currently not collectible status—When both you and the IRS agree that you owe taxes and that you cannot pay the full amount of taxes owed, you have the option to have your account classified as Currently Not Collectible or CNC. To qualify for CNC status, customers will need to provide various documents including pay stubs of their current or recent job, statements from all monthly income sources, real estate bills, recent mortgage/lease statements with their monthly rent/mortgage amount, utility bill details, recent statements for all credit cards, personal property tax bills for all vehicles owned (including mileage and payment details), proof of assets, and proof of expenses.
• Innocent spouse relief—If your current or past spouse filled out a tax return incorrectly, you may be penalized alongside your spouse unless you qualify for Innocent Spouse Relief. If you do not qualify for Innocent Spouse Relief, the IRS can collect the owed tax debt from both you and your spouse (or one or the other).
• IRS appeals—If the taxpayer does not agree with certain IRS findings or penalties, he/she can file an appeal with IRS Appeals Office.
• Audit defense—When the IRS suspects discrepancies in your tax return, it performs an audit (by mail, in office, or in field/home). You have the legal option to add Audit Defense to the IRS auditing process; this means that you can have a licensed tax professional represent you against the audit.

For many of these solutions, individual taxpayers must demonstrate financial hardship to the IRS. Additionally, there are strict requirements for penalty abatement, so some taxpayers may not be eligible. The tax experts at a relief agency can help you navigate this process successfully. Most tax relief companies focus on helping people resolve debts. Because each case is different, the cost of relief services varies.

The best tax relief companies offer free consultations to review the case and explain fees. Average fees range between $2,500 and $5,000. However, the fees are based on the extent of services required by the client's tax situation.

Potential clients should take advantage of a free consultation with a tax resolution company or tax resolution firm to learn more specific information about the cost and how the relief agency will settle their debt to make it something they can afford to pay.

Some tax relief companies also offer support and programs to help clients stay out of debt, like account monitoring and audit protection. Other companies offer tax preparation services in addition to their relief services. These services can help ensure that you pay your taxes in full, receive your tax refund, and avoid future tax problems. If you are interested in tax preparation services, make sure the tax relief agency you choose has a tax preparer or certified public accountants (CPAs) on staff.

Accreditations

Years of experience in the industry and accreditations should be considered when choosing a tax law firm or tax relief company. Are the company's tax professionals currently involved with important accreditation organizations?

The National Association of Enrolled Agents (NAEA) provides enrolled agents with training and opportunities to excel.

The American Society of Tax Problem Solvers (ASTPS) offers certification for highly qualified CPAs, enrolled agents, and tax attorneys who have expertise, experience, and good ethics. The National Association of Tax Professionals (NATP) promotes ongoing tax education. This is important because tax laws and case laws can change.

Tax relief customers who have the benefit of a dedicated enrolled agent with membership in the NAEA are ensured that the enrolled agent is held to high professional standards.

Several other national organizations also provide training and regulate industry standards, including the National Association of Tax Professionals (NATP) and the American Society of Tax Problem Solvers (ASTPS), alongside other professional tax organizations.

Tax attorneys receive their certification by passing the state bar exam. Effective attorneys can help you resolve your problems because of their knowledge and experience with tax laws.

Because each state has different tax laws and standards, it is also imperative that tax relief companies understand the state tax laws that affect your current debt situation. State-specific organizations provide tax law training to enrolled agents (and other tax professionals).

For example, the Washington Association of Accounting and Tax Professionals (WAATP) provides professional development to those in Washington. Such state-specific tax organizations only strengthen a company's ability to serve the unique needs of each taxpayer. Be sure that the tax relief service you choose hires well-trained experts and attorneys.

Another good indicator of a tax resolution firm's performance are tax relief reviews. Customer reviews will give you insight into how professional the company is and how effective it was at resolving client tax problems, like unpaid taxes, liens, and wage garnishment.