Tax Relief Services: What to Expect With A Tax Relief Company
If you have taxes owed or a serious tax problem, tax relief services can be essential. There are fees for these services, but in most cases, the benefits outweigh the costs. Tax relief services can help you eliminate penalties, reduce your tax bill, and/or get the IRS/State Agencies off your back in regards to enforced collection actions. Tax professionals can also stop wage garnishments and prevent asset seizure.
The right option often depends on your financial situation or the company’s financial situation, but here’s an overview of the process.
Free Tax Consultation With Tax Relief Services Assessment
The process starts with a free consultation. It typically lasts about 30 minutes but can take longer. During the discussion, a tax professional will qualify you and ask you questions about your tax and financial situation to ensure you would benefit from tax services. During the call, you will understand your options in most cases. Most companies and professionals specifically specialize in handling IRS tax issues, so if you have a state tax issue, but be sure the company has knowledge in helping with that specific state taxation agency as well. You can search for top tax professionals by agency and problems using the form below. At TaxCure, we have developed a system that allows taxpayers to find top-rated tax professionals by tax agency, problem, solution, and more. Start your search today.
After You Chose a Tax Relief Firm or Tax Professional
Once you choose a firm or an individual licensed tax professional, you start by signing an 8821, or a Tax Information Authorization form. If you representing a business, you will be required to use this form as well. This form enables a licensed tax professional to complete a tax compliance check to find out the services you may need along with your tax options.
The IRS generally won’t work with you unless all past returns are filed. Therefore, it is essential for a licensed tax professional to know your tax compliance situation.
Tax Resolution and Settlement Process Begins
Next, the company will generally present you with a list of IRS programs and/or State tax programs you can pursue after a licensed tax professional reviews your transcripts and understand your financial situation. It is often known as a compliance check.
The tax relief firm will provide a breakdown of the fees involved. The company assigns your case to a tax attorney, an enrolled agent, or a CPA who will be representing you or your business if you agree to the services and fees. Before representation becomes active, you will need to sign a 2848 or Limited Power of Attorney form (POA) so that the licensed tax professional can resolve your tax problems by directly speaking to an IRS agent or Revenue Officer. In some cases, several professionals may work together on your situation.
The licensed tax professional finds the most practical tax relief solution for your situation. Some common IRS solutions are the following,
- An Installment Agreement (payment plan)
- Hardship Status Request (Currently not Collectible)
- Partial Payment Installment Agreement (PPIA)
- Offer In Compromise
- Innocent Spouse Relief
- Audit Defense
- Identity Theft Victim Assistance
Each state has its own set of solutions they offer as well. Many of the solutions mirror what the IRS offers, but will require completely separate filings to address state issues.
The goal is to balance what the IRS/State will accept with your budget. Your tax professional handles all the paperwork associated with applying for a settlement or payment plan.
The process is not always quick, but once you hire a tax firm, at least you are moving in the right direction. You can save money and eliminate stress by tackling your problems sooner rather than later.
Settlement Approved and Taxpayer in Full Compliance
When the IRS approves the proposal, you make the required payment. For instance, if you applied for an offer in compromise, you pay the agreed-upon amount if the IRS accepts the offer (generally have to wait 9-12 months). The IRS is entirely off your back, but you have to ensure you stay compliant with tax filings and payments for the next five years.
After that, as long as you stay up to date on payments and compliant with future filing requirements, you stay in good standing with the IRS. Your tax professional will also give you tips on how to avoid future tax problems. Last but not least, once you set up a resolution with the IRS, and the tax professional provides future guidance, the licensed tax professional will generally withdraw the POA with the IRS.