Wondering how much do tax relief services cost? We got you!
You certainly already know that if you’re struggling with debt or financially in general, you can apply for tax relief so that you can more easily overcome a difficult time.
With the pandemic, and the economic crisis that followed, tax relief has become a more popular subject, and there are many wondering how you can apply for tax relief.
The most recommended way to apply for tax relief is the one that enhances your chances of obtaining the kind of help you’re seeking: if you want to make sure you apply for the right type of tax relief and you’ll end up obtaining it, then your best option is to hire tax relief services.
How can you hire tax relief services?
Tax relief services are usually provided by tax relief companies: these companies are firms where lawyers are specialized in fiscal issues.
Generally, you can contact them, speak about your financial issues and your needs, and they’ll interact with the fiscal authorities on your behalf.
Also Read: Precision Tax Review
How much do tax relief services cost?
And now, we come to the main topic of this article: do tax relief services have a cost? As you can easily imagine, yes, they have.
The cost of tax relief services varies a lot: it depends on what kind of work lawyers need to do for you.
For example, if you need tax relief for your company, the services will be more expensive than, for example, if you need tax relief for yourself as an individual.
Generally speaking. However, tax relief services can go from a minimum of $2000 up to becoming extremely expensive: even $10,000 or $20,000.
So many people often ask themselves a simple question: how can I improve my financial situation if, in order to obtain the help I need, I need to spend thousands of dollars on tax relief services?
Tax Relief Services & Their Costs
Tax relief services cost varies based on the company you choose, services you opt for, complexity of situation, etc.
Here are a few tax relief options and their cost:
|Penalty abatement||$250 – $1,000|
|Currently not collectible||$1,500 – $4,000|
|Discovery/investigation fee||$250 – $750|
|Installment agreements||$1,500 – $5,000|
|Innocent spouse relief||$3,500 – $5,000|
|Offer in compromise||$2,000 – $7,500|
1. Penalty abatement
Penalty abatement helps you in avoiding penalties and wage garnishments related to your tax debts.
To get a penalty abatement, you will need to prove that you are facing financial hardship. The fee for this is $250 – $1,000 on average.
2. Currently not collectible
This service shows that you are not able to afford taxes or cannot face collections or penalties because of your overdue balance. This service typically costs $1,500 – $4,000.
3. Discovery/investigation fee
This is the initial fees that you pay to your tax relief company so that they can do an initial investigation of your tax debts. This service costs $250 – $750.
4. Installment agreements
This service lets you pay your due taxes over time in installments. This can cost you $1,500 – $5,000.
5. Innocent spouse relief
This service helps ex-partners to save themselves from tax-related penalties and situations caused by their former partners. This costs $3,500 – $5,000.
6. Offer in compromise
In this, you get to settle your tax debt for a lower amount than due. This service can cost you $2,000 – $7,500.
Fees Structure of Tax Relief Companies
Different tax relief companies have different tax relief fees structure. Here’s what the different payment options look like:
- Deposits: In this structure, you pay a small deposit or initial fees to secure the services of a company and then pay the rest of the amount upon receiving a resolution.
- Upfront Payment: As the name suggests, you are supposed to pay the entire tax relief fees upfront in this type of structure. You need to be wary of companies that have this type of payment structure, as it could be a scam.
- Payment Plan: In this structure, the tax relief company may ask you to make monthly payments till your bill is settled fully.
- Partial Upfront Payments: In this, you pay a portion of your fees upfront and the rest later.
Are tax relief services still worth it despite the cost?
It depends on how bad your situation is. Let’s make an example.
If you have a $2000 debt, then hiring tax relief services won’t be worth it. Instead of paying $2000 for a lawyer’s fee, you can spend that money to pay your debt and gain financial freedom.
However, if you have a huge debt, and there are chances you can have that debt canceled, delayed, or reduced, then even after you’ve paid the firm, you’ll end up saving thousands of dollars.
Read: Community Tax Review
What to Look For in a Tax Relief Company?
How to reduce the cost of tax relief services?
The best strategy to reduce the costs of tax relief services is by contacting only the companies that offer a free first consultation. During this consultation, try to understand:
- what kind of tax relief they can get you: in other words, how much money they can let you save;
- a precise quote for their services.
With these two pieces of information, you can evaluate whether or not it is convenient for you to hire them. Repeat the same process with more than one tax relief company so that you can, on one side, make sure that the information they provided you are correct and – on the other side – see if you can find a better deal.
Hiring a tax relief company may be a good option for you in case you find yourself stuck.
However, remember that everyone’s tax situation is different and what worked for someone else may or may not work for you.
Do you research first and only then decide to hire a tax relief company for yourself.
For how much does IRS ideally settles for?
The IRS ideally settles for what it seems is feasible for you to pay.
For this, they take into account your savings, monthly expenses, income, etc. The average settlement for the same is $5,240.
Does the IRS offer one time tax forgiveness?
Yes, the IRS offers one-time tax forgiveness or penalty abatement but not to those who have multiple penalties or were late beyond excuse in repaying their dues.
Should I hire a tax relief company to help me?
Tax relief companies have years of experience in dealing with tax related problems.
So you should go for a tax relief company if you find yourself in a dire tax-related problem and require help.
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.