Taxpayer's Guide to Tax Resolution Services
Why You Should Look for Local Services Near You
If you have a tax problem, you need tax resolution services. Unfortunately, this industry can be more than a bit scammy, and to protect yourself, you should develop a brief understanding of the field before hiring someone to help you. Avoid those top 5 and top 10 lists of resolution companies, and we have a quick solution at TaxCure to help you find the best pro for your needs.
The quickest advice we can give is this — look for a well-respected local tax professional who has experience with your tax concern.
Want more details on what this all means? Then, keep reading. To help you become a confident consumer, this guide takes a detailed look at tax resolution services. It explains what they entail, how to hire a professional, and the importance of looking for a pro in your local area.
What Is Tax Resolution?
Tax resolution is the process of hiring a tax professional to help with your tax problems. The tax pro will look at your tax issue and talk with you about your finances. Then, they will help you create a plan to get back into compliance with the IRS or your state revenue agency.
The resolution option the pro suggests will vary based on the agency's rules — for example, the IRS has different relief programs than most states. It will also depend on your personal financial situation and your preferences.
Tax Resolution Vs. Tax Relief
Tax relief focuses on relieving you of your tax burden through penalty abatement and tax settlements. Tax resolution focuses on resolving your tax issues using any and all available strategies. Although people may use the phrase tax resolution interchangeably with tax relief, these services have slightly different nuances.
Types of Tax Resolution Services
There are different resolution services for every type of tax problem, and they include the following:
- Audit representation
- Filing back taxes
- Voluntary Disclosure
- FBAR resolution services
- Resolution services for business taxes
- Responding to substitute for returns (SFR)
- Appealing assessments
- Penalty Abatement
- Trust Fund Recovery Penalty
- Appealing wage garnishments
- Stopping bank levies
- Withdrawing, subordinating, or releasing liens
- Setting up payment plans
- Settling taxes through an Offer in Compromise
- Currently Not Collectible
- Help with state tax problems
Keep in mind that even in the world of tax resolution services, there are specialties. All resolution specialists can help you set up a payment plan or apply for a settlement. They can also help you appeal collection actions (such as wage garnishments) or get levies released.
However, if you're dealing with an audit or filing back taxes, you need someone who has dedicated experience with those services. For FBAR violations, criminal tax fraud issues, or help with a Voluntary Disclosure, the need for a specialist is even more pronounced.
How Do Tax Resolution Services Work?
Here's a boiled-down version of the tax resolution process:
- You tell the tax resolution specialist about your tax problem.
- The specialist gives you an overview of the resolution options.
- You chose a resolution option.
- The tax pro deals with the IRS to resolve your tax issue.
Some tax resolution specialists start with a free consultation. Others take a few of your details, and then they let you know about their paid consultation options. In all cases, make sure that you understand the pricing structure and the general services you will be getting before you agree to work with a tax resolution company.
Once you hire a tax resolution firm, or a professional that specializes in tax resolution, you will provide them with a signed authorization to access your tax records and file forms on your behalf. They will access many records from the IRS's online system, but they will likely also need to obtain tax records and related documents from you.
Based on your specific tax problem, the tax pro will identify a solution. They will explain the objectives and what you will gain from their recommendation. Then, they will help you file any necessary forms or explain what other steps you need to take.
The process varies based on the problem that you are having. For instance, if you're dealing with an audit, your accountant will talk with the auditor, provide the requested documents, and argue your side if an interpretation of the tax code comes into play. If you can’t pay your taxes owed, they will likely do a full financial analysis to understand your current financial situation to determine what types of resolutions you qualify for.
In contrast, if you're dealing with unfiled FBAR reports, your tax pro will help you decide if you should take advantage of the IRS's voluntary disclosure program. Then, they'll gather historic bank statements and other documents to fill out the report for different years. Finally, they will file the required documents and help you deal with any penalties or other consequences.
The cost of tax resolution services varies based on the complexity of the problem and the professional you hire. Before agreeing to tax resolution services, make sure that you understand how the pricing works. For example, are you paying hourly or based on the service? Although you may need to pay some money upfront, you should be leery of companies that charge large upfront fees that you don't understand.
Tax Pros Who Provide Resolution Services
There are only three professionals who can represent you in front of the IRS, and they include CPAs, EAs, and tax attorneys. If you work with an accountant who is not a Certified Public Accountant (CPA) or a tax preparer who doesn't have any of these credentials, they cannot represent you in front of the IRS.
Again, keep in mind that not all CPAs, EAs, or attorneys have experience with tax resolution. For the best results, you should look for tax pros who focus on resolution services. This is especially important if you're dealing with complex business taxes, high balances, or incorrect assessments.
Do All Accountants Offer Tax Resolution Services?
Most accountants who prepare tax returns offer basic tax resolution services. For example, they may be willing to help you request a payment plan if you file your tax return and can't afford to pay a balance due. Or they may be able to help you respond if the IRS makes unexpected changes to your tax return.
Other than that, most accountants typically don't offer these services. Accountants tend to specialize. Some are employed internally by big corporations, and they don't know much about individual or small business tax returns. Others focus on individual and small business tax returns and don't know too much about internal corporate accounting or tax resolution.
Tax resolution services deal with a very specific part of tax law. Tax pros who offer these services have an in-depth understanding of the IRS's resolution programs, and they know how to finesse the situation to get the best results possible for their clients.
Unfortunately, the IRS's resolution options and collection procedures change regularly. This makes these services confusing even to experienced tax professionals. Tax pros who specialize in this area stay up-to-date on changes, and they leverage their experience to identify the best resolution strategies for their clients.
Types of Tax Resolution Companies
There are two main types of companies that provide tax resolution services: big nationwide firms and small local companies.
National Tax Resolution Companies
These companies dominate the tax resolution industry, and that's not a good thing for consumers. Big resolution firms spend a ton of money on advertising, and although they have tax pros on staff, you usually never know who's working your case.
Imagine choosing a surgeon for an important procedure, but you don’t know their track record until you’re already under anesthesia. Similarly, with these national companies, you are often left in the dark about the specific tax professional handling your tax and financial situation. It’s a gamble that can leave regrets.
The biggest names tend to be the worst tax relief companies. They're notorious for providing subpar, over-priced services, and they lack state-specific experience. However, due to pay-to-play marketing, these companies are heavily featured in articles about the best tax relief companies. Note that this is not just our opinion — the FTC echoes these concerns about the tax debt relief industry.
If you choose to go with a national tax resolution company, just be sure you ask who will be working on my case, what their experience is with situations like mine, how many years of experience they have, and if I can talk to the professional. If they cannot answer those questions, it is a huge red flag.
Small Tax Resolution Companies
Small tax relief companies tend to employ multiple tax pros with different areas of specialty. These companies have much more modest marketing budgets, allowing them to keep their prices reasonable. Although you may talk with a sales rep or a customer care agent, you will know the tax pro working on your case.
In some cases, these firms are much smaller. They may consist of a single tax professional who provides their clients with hands-on help to solve the tax problem. Again, the most important thing is to understand their experience and their pricing structure.
How to Find Tax Resolution Professionals
A quick internet search for tax resolution services will generate links to the big firms' websites, articles about these services that recommend the big firms, and possibly a small list of local companies that provide these services. Realize if you search the internet for any type of problem-related to tax resolution, all of the top results are paid ads.
Many times, the following results are organic articles but have paid sections promoting the same players. Why? Well, the algorithms work in a way to give searchers what they are most likely to click on and interact with. I mean, if you saw a guide on the best tax resolution companies published by a trusted source, you would likely click on it, and this results in them rising to the top of search results. If you read the disclaimer on this page though, it will state that the companies listed there are paying to be there, or the site will use weaker language like "we don't have time to review all companies".
For best results, you should avoid the big firms, but you may want to check out some of the local links. Keep in mind that some big firms may appear in the local section, especially if they have an office based in your area. Avoid websites that say something like “Top 10 Tax Resolution Companies.” The fact is you cannot rank the top 10 tax resolution companies because there are so many problems and solutions, and nobody is specialized in them all. The only thing you can rank is the top-paying tax resolution companies to obtain your information. Generally, they are ranked by who is paying more to get your information.
Alternatively, you can use our search on Taxcure.com and search for a local tax professional. TaxCure has a huge directory of articles with guidance on how to resolve your own tax problems. These educational posts can also help you become a savvy consumer if you decide to hire a professional. Using this site, you can search for tax pros in your area with the experience you need. Then, you can review the list of results to narrow down your search even further. Once you have a short list, just reach out to a few and then, choose the pro who's the best fit for your unique situation.
If you're a tax professional, you may want to offer these services. Tax resolution services can be a great way to spread your work out throughout the year, rather than just being busy at tax time. It's also an industry with a lot of potential as taxpayers want local professionals they can trust. There are all kinds of training resources, products such as tax resolution software, and groups such as the American Society of Tax Problem Solvers to help you get started on this career path. If you do offer tax resolution service, getting found is one of the hardest aspects to enter the game. You can join TaxCure and be part of the largest online directory of tax resolution professionals and showcase your unique expertise to help taxpayers find the best local professionals.
Get Tax Resolution Services Now
Ready to get help with your tax issue? Want a resolution so that you can move on with your life and put your tax problems behind you? Then, use TaxCure to search for a tax pro today.