As you may already know, you have two main ways of obtaining tax relief: when the government rules for one particular form of tax relief during a particular period (for example, during or after the pandemic) or by hiring a tax relief company that is going to work to let you obtain the tax relief you need to, for example, overcome a difficult time of your life.
But how do tax relief companies work? How can they let you have the tax relief, you ask?
What is a Tax Relief Company?
A tax relief company is usually a firm of lawyers that put their knowledge and services at your disposal.
What they do is listen to your needs and then interact with the fiscal authorities on your behalf to let you obtain some kind of relief.
They’ll help you fill out all the necessary papers, they’ll submit them to the entities, and they’ll remain in contact with you to let you know the outcome of your applications.
Of course, a tax relief company requires a fee, but it’s usually still convenient to hire them because, despite paying the fee, you can end up saving a lot of money thanks to the tax relief they can let you obtain.
Also Read: Alg Tax Resolution Reviews
What can tax relief companies do for you?
Now that you know what a tax relief company is and how they usually work, let’s move on to find out what they can do for you.
Thanks to a tax relief company, you can obtain different forms of economical help:
- Debt cancellation: In particular circumstances, one can erase debts. However, the circumstances that allow debt cancellation are very peculiar, and not every debt will be erased. However, hiring a tax relief company also means having a professional capable of evaluating whether your case could or could not obtain debt cancellation (so that you can decide if it’s convenient to proceed with the application).
- Tax delay: One of the most common forms of tax relief is the simple delay. With this, you can avoid paying taxes now. However, the moment will come when you’ll need to pay the current taxes plus the taxes you delayed in the past. This is ideal to overcome particularly difficult periods, but you need to work hard during this period to make sure that, when the moment comes, you can pay your taxes as required.
Also Read: Enterprise Consultants Group Review
Here’s What Reddit Users Think
ELI5: How do tax relief companies help you? Thanks!
by u/linvmiami in explainlikeimfive
Different Ways to Get Tax Relief
Here are some of the ways to get tax relief:
1. Offer in Compromise
Offer in compromise lets you settle your debt for a lesser amount than what you owe.
However, the IRS takes into account your income, expenses, interest rates, etc., before allowing an offer in compromise.
2. IRS Repayment Plan
The IRS also allows you to repay your due tax amount in smaller installments.
To qualify for a long-term plan (more than 120 days), you need to owe $50,000 or less in taxes, penalties, and interest combined. And to combine for a short-term plan (less than 120 days), you can have a tax bill of $100,000+ or higher.
3. Interest Abatement
In this, the IRS forgives you for the penalties that you have been charged for meeting certain criteria.
In this case, you will still owe the taxes, but the penalties will be removed, so your overall tax debt will be lower.
Tax Settlement Companies Price Tag
Many tax settlement companies charge an initial fee of $3,000 and $6,000 from their clients.
The amount may vary depending on the complexity of the situation, proposed settlement, size of the tax bill, etc.
This fee is ideally non-refundable, so you should be very careful while choosing a tax settlement company.
How To Find a Legitimate Tax Relief Company?
Here are some of the red flags that you can look for to find a legitimate tax relief company:
- Do not trust companies that ask you to make full upfront fees without disclosing how they will be allocating the money and what the process will look like.
- A legit company will ask you questions and do their research regarding your tax obligations. Make sure you only trust companies that do this.
Is Hiring a Tax Relief Company Mandatory?
When you want to apply for tax relief, you don’t have to hire a tax relief company.
However, it is recommended to do so because the chance of obtaining what you’re asking would increase.
When working with tax relief companies, you only ask for tax relief that you have the chance to obtain (this is thanks to the lawyers’ competence), and this is why you are likely to obtain what you’re asking.
On the contrary, when you try asking for tax relief on your own, without even knowing if you’re eligible or not, without knowing if others in your situation have obtained what you’re asking before you, you are far less likely to obtain it.
Also Read: When Will The Unemployment Tax Relief Be Available?
Tips For Taxpayers
If you are facing any issues with your tax obligation, then here are tips that can be of help:
- Read the notices from IRS carefully and ask the agencies about collection alternatives.
- Be wary of tax relief companies who ask you to make the full payment upfront without an explanation of the billing of the services.
- Do not trust companies who say you “qualify” for the tax relief program. Only your state comptroller or IRS can confirm the same for you.
Wrapping Up
In this article on how do Tax Relief companies work, we gave you all the details regarding tx relief companies, and we hope you found this helpful.
FAQ’s
Does unpaid taxes affect my credit?
No, unpaid taxes are no longer shown on your credit and do not affect it.
However, if, in the future, you apply for loans, then financial institutions can check your public records, and your unpaid tax liens may show up there.
How to prevent tax identity theft?
Here are a few things to prevent tax identity theft:
- Keep your social security number and documents containing this number in a safe place.
- Request for identity theft pin from IRS.
- Do not send any kind of personal information such as SSN, date of birth, etc., over text or phone.
Shefali Jain is a Content Editor & Writer at National Planning Cycles.
After completing her graduation in hospitality, Shefali decided to follow her passion and started writing. Shefali has been writing for two years now and contributes to our website as a skilled editor and content writer with strong research skills. Writing product and service reviews, biographies, and book reviews are some of her key areas, among many others in which she specializes.
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