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Tax Debt Relief Services

by Jill BowersLast Modified: June 25, 2018

Why Use a Tax Debt Relief Company?
Pricing
Reviews
What We Evaluated; What We Found
Do I Need a Tax Debt Relief Agency?
Is the Tax Debt Relief Company Legit?
Common Tax Debt Questions & Answers
Map
Services
Guides & Whitepapers (Downloads)
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The Best Tax Debt Relief Services For 2018

Don't Panic, Get Help With Tax Debt Relief. If you've received notices from the IRS claiming you owe the government money, you may be looking for options. Tax debt relief services can help clients negotiate settlements with the IRS.

Why Use a Tax Debt Relief Company?

The top performers in our review are Tax Defense Partners, the Gold Award winner; Tax Defense Network, the Silver Award winner; and ALG Tax, the Bronze Award winner. Here’s more on choosing a service to meet your needs, along with details on how we arrived at our ranking of 10 services.

When the IRS lets you know that you owe taxes, a common and reasonable reaction is panic, especially if you owe a great deal of money to the government. People often seek help from tax debt relief services. These companies present your case to the IRS and negotiate on your behalf for payment plans, innocent spouse release and other compromises.

After you receive word that you owe the IRS money, you'll likely start receiving mail from companies claiming that they can help you navigate the system. While these tax debt relief services may appear to be a godsend, you should be aware that this industry is rife with scammers and fraudulent companies. There are legitimate companies out there, and if you choose to hire a tax relief service, it's important that you pay attention to make sure the service you use is valid. We have worked to ensure that all of the services presented in our review are legitimate companies.

Pricing

Reviews

Tax Debt Relief Services: What We Evaluated; What We Found

We reviewed multiple tax debt relief services and whittled the companies down to the 10 best. In our evaluations, it was important that each company was legitimate, competent and provided excellent customer support. We rated each company based on multiple interactions over many days, each presenting the company with different tax debt scenarios. The scope of our testing only evaluated the customer support we received as a potential customer. The scores in our review do not reflect customer service once you sign up for the service, but only as far as the initial consultation.

How Did We Determine That Each Company Was Legitimate?
We made sure that each of the companies in our lineup have either a tax attorney, certified public agent (CPA) or enrolled agent to represent you before the IRS. Having a "tax professional" is not enough; only attorneys, CPAs and enrolled agents are legally permitted to represent you to the IRS. In our review, companies with more than one type of authorized representatives ranked higher since these professionals have different areas of expertise. Tax attorneys are especially familiar with tax laws; CPAs are more familiar with the financial aspects of taxes; and enrolled agents tend to know the ins and outs of the IRS well.

When we tested tax debt relief services, we selected services that have been in business for longer periods of time. The longer a business is open, the more likely that it is legitimate since it continues to sign customers and help them with IRS problems. Furthermore, such a company is apt to have a lot of experience working with the IRS and in your best interest.

Competency Score
As part of ascertaining each company's legitimacy, we presented several tax debt scenarios to representatives of each company and created a competency score based on our interactions. Each company's competency score takes into account the representatives' thoroughness — how much time they spent with us and how much information they provided – and how knowledgeable the representatives were. It also considers whether the information we received was consistent in every interaction and if the representatives would answer our questions without requiring personal information. Finally, it also includes the company's helpfulness in presenting options and suggestions for solving the problems we presented in our testing scenarios. Tax Defense Partners, ALG Tax, US Tax Shield and Optima Tax all earned full marks for this score.

Reliability Score
When you're under fire from the IRS, it's a stressful time. The last thing you need is for the people you've called for help to add to that stress. For this reason, we created a reliability score to help illustrate how communicative, helpful and responsive the customer support we received was in our testing. While most of the companies we spoke with were communicative and professional, several did not respond to email and did not follow up with us following our initial query. Companies that were less responsive in these specific ways in our testing did not score as well in this area as companies that were more so. While this score, among all the items we evaluated, isn't the most significant aspect of choosing a tax debt relief service, it is worth noting as you consider the company's phone and email availability and communication practices.

Business.com seeks, whenever possible, to evaluate all products and services in tests that simulate as closely as possible the experiences of a typical consumer. The companies had no input or influence over our test methodology, nor was the methodology provided to any of them in more detail than is available through reading our reviews. Results of our evaluations were not provided to the companies in advance of publication.

Tax Debt Relief: Verdict & Recommendations

If you've received notices that you owe money to the IRS, and if you feel that the situation is more than you can handle on your own, a tax debt relief service may be helpful to you. We especially recommend the best tax resolution companies in our review: Tax Defense Partners, Tax Defense Network and ALG Tax. These three services earned the highest competency scores on our lineup due to their agents' thoroughness, knowledge and overall helpfulness. Each of them also has all three types of qualified tax professionals that are legally able to represent you in front of the IRS. ALG Tax also has a tool on its website for decoding official IRS letters, which can be helpful while you try to figure out your options.

What to Expect if You Choose a Tax Debt Relief Service

The worst thing you can do when you start receiving notices from the IRS is nothing. Whether you choose to work with the IRS on your own or you hire a tax debt relief service, be sure to address what's happening to you before liens are placed on your credit and before the government levies your properties and assets.

The best tax debt relief companies work with the IRS upfront to investigate your case and find out where your tax debt is coming from and what negotiations and programs you're eligible for. All companies charge for their time during this stage. Some of these services roll this work into their flat fees, while others charge a separate fee for this investigative work. Still others may charge a retainer at this stage that will go toward the total cost of working on your case.

What Negotiations Can You Expect? 
If you feel that a tax debt relief service is best for you, you should expect that the service will work with you on unpaid taxes, back taxes, payroll tax, tax liens and tax levies, which include wage garnishment and asset seizure.

A legitimate tax debt relief company can't guarantee you that they will earn you a specific type of relief. You may qualify for an offer in compromise, which is where you and the IRS settle on a lesser amount than what you owe, provided you can prove that you can't pay the full amount. You may, instead, need to pay the taxes and create an installment agreement, which is where the amount you owe is split up into smaller payments over time.

The company can look into whether you qualify for innocent spouse relief, which means that if your spouse filed the taxes incorrectly or did something illegal, you may not be held responsible if you can be proven innocent.

You should also expect your company to offer negotiations for currently not collectible (which means that you cannot make payments due to economic hardships), as well as penalty and interest abatements and levy and garnishment release. In these negotiations, the debt relief company works with the IRS to stop your tax interest and penalties from accruing, and it also fights to remove any levies from your wages, property and other assets.

Whatever your situation, your tax debt relief service should be fighting for what you qualify for and what will best help you.

Do I Need a Tax Debt Relief Agency, or Can I Do It Myself?

While you're looking for relief from tax debt, it's important to consider all of your options. These services are experts at working with and navigating through the IRS and can save you time and headaches, but you should know that there are ways for you to reach agreements with the IRS yourself, for free and without requiring representation. If you want to work with the IRS directly, try the IRS Fresh Start Initiative. You can also receive guidance and representation from the Taxpayer Advocate Service.

IRS Fresh Start Initiative
The IRS Fresh Start Initiative is a government program that allows you to work with the IRS if you're facing financial difficulty because you have tax debt. Through this program, you can reach installment agreements that allow you to pay your tax debt in smaller payments over an extended period of time, rather than in a lump sum all at once.

With this initiative, you can also work with the IRS to reach an offer in compromise (OIC). An offer in compromise allows you to settle your tax debt for less than the total amount owed. You must be able to prove that you cannot pay the full amount. The IRS can settle for a lesser amount if you can prove that the amount you're trying to settle for is the highest amount a collection agency would be able to collect from you.

Taxpayer Advocate Service
The Taxpayer Advocate Service is part of the IRS that works on your behalf. If you've tried to work things out with the IRS yourself and failed, you may qualify for this service, which is free and available in all 50 states. The Taxpayer Advocate Service offers representation for you to work with the IRS, and, in essence, does what tax debt relief services do.

This service also works to uphold the IRS's Taxpayer Bill of Rights, which includes all of your rights with the IRS, including your right to be informed, to have representation and to challenge the IRS and be heard.

How Can I Tell if a Tax Debt Relief Company Is Legit?

A lot of companies advertise that they can help you settle your tax debt for "pennies on the dollar," or offer a deal that is only available for a very limited amount of time. You may receive mail and phone calls that claim outstanding results that they can't possibly really guarantee. You should be aware that these are common tactics used by tax relief scammers. We strongly recommend that you do not share any personal information with, and certainly do not pay any money to, any company before you feel satisfied that they're legitimate. If you do call in to a company for more information, be sure to ask questions and determine the qualifications of the company's employees.

Ask Questions & Check Qualifications
When you call to find out more about a company, it's important that you ask a lot of questions. Find out what the company can do for you, how long they've been working with the IRS, what credentials their representatives have, and other information. The longer a company has been in business, the better, and you should expect that the company has enrolled agents, certified public accounts or tax attorneys on staff. These are the only people legally authorized to represent you before the IRS, so it's imperative to make sure that one, if not all three, of these tax professionals will be working on your tax case. A legitimate company is more likely to answer all of your questions transparently, offering concrete information and not evading any questions you ask.

Common Tax Debt Relief Services Questions & Answers

Have a tax debt relief service question of your own?

This is what's referred to as reconstructed records project, which I have plenty of experience in, having done this for startup founders such as yourself and other businesses that were somehow profitable while run out of the owner's checkbook (not recommended :-). Step 1 is to get the books in order, then Step 2 is to get with an experienced CPA or Enrolled Agent who likes to rehabilitate those in tax arrears. They are on your side and will manage the process for least impact on you and your...

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Hi Shania. There are a few different taxes to consider. Federal and State taxes, and how you pay for those will depend on your business form, ie Sole Proprietor, Partnership, Corporation, S-Corp..etc. I will speak on Sole Proprietor as it is by far the easiest and cheapest form you can choose and I am assuming you are in business for yourself which is also a whole lot cheaper than having partners. Typically the first tax you will pay will be the fee for registering your Doing Business AS...

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#1 Get legal advice from someone in your jurisdiction. The answer is going to depend a great deal on: Corporate structure: corporation, LLC, partnership, etc. (and how those are treated under your laws) Any/all agreements in place, including compensation for your time. Whether the debt has been signed off personally or only in company name. The main lesson you should take from this: corporate structure is important, and it's important that it be in writing, including termination...

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It depends whether you are a cash-basis taxpayer or an accrual-basis taxpayer. Cash basis taxpayers record income when received and record deductible expenses when paid (in your case, bill deductible in 2017). Accrual basis taxpayers record income when billed and deduct expenses when incurred (this would be where you could deduct the bill in 2016). So you need to know whether you are reporting on cash basis or accrual basis. Should be a checkbox on your tax return to tell you which one you...

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I think the first thing you need to determine is if you are an independent contractor in which case he will give you a 1099 or if he considers you to be working under the table (paid in cash basically). If he is considering you to be working under the table, basically filing taxes on that income will trigger some problems but working under the table is also illegal. Now if he is considering you to be an independent contractor then he will give you a 1099 and you will file a schedule C plus...

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I agree with Laurie and Kim. However, I also would caution you not to jump to conclusions too fast. Businesses can lose money for multiple years and yet be fine if the owners can capitalize it from other sources; maybe they want the tax benefit of a loss in one business to offset the profits in another one. This can be a successful strategy to get a biz up and running, hoping that eventually it does make a profit. The paying under the table is a huge red flag, though. That alone...

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Map

J David Tax Law
7077 Bonneval Rd
Jacksonville, FL
J David Tax Law
Tax Defense Network
9000 Southside Blvd.
Jacksonville, FL
Tax Defense Network
Clean Slate Tax
875 Mamaronek Ave
Mamaronek, NY
Clean Slate Tax
ALG Tax
115 W Allegan
Lansing, MI
ALG Tax
Optima Tax
3100 S Harbor Blvd
Santa Ana, CA
Optima Tax
Washington Tax Services
2233 1stAvenue
Seattle, WA
Washington Tax Services
Top Tax Defenders
7324 Southwest Fwy
Houston, TX
Top Tax Defenders
US Tax Shield
3500 W. Olive Avenue
Burbank, CA
US Tax Shield
Tax Tiger
6355 Riverside Blvd
Sacramento, CA
Tax Tiger
Instant Tax Solutions
1581 E. Edmondton Ave
Post Falls, ID
Instant Tax Solutions
Tax Defense Partners
6345 Balboa Blvd
Encino, CA
Tax Defense Partners

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