Scott Debt Consolidation Reviews

Guide to Tax Relief

The tax relief landscape can be confusing and difficult to navigate. This guide provides basic information on tax relief concepts, as well as information on the many tax relief programs offered by tax relief companies. By understanding the options available, you can make an informed decision on which tax relief program is right for you.

Exactly what is tax debt relief?

A tax debt relief strategy refers to a number of measures and strategies designed to assist individuals in paying their taxes or reducing their tax obligations.

The term “tax relief” has come to refer to payment plans, settlements (called offers-in-compromise), and wage garnishments offered by federal and state governments to help those who are struggling to pay their tax debt. These programs can provide much-needed assistance to taxpayers who are struggling to meet their obligations.

When it comes to paying taxes, there are a few different options available to you. Depending on what state you live in, the regulations for paying taxes can vary.

When it comes to taxes, there are a few options available for payment. It’s possible to negotiate these options with the IRS directly, but in some cases, it may be worth hiring tax professionals.

If you’re struggling to pay your taxes, you may be able to find help from a tax relief company. These businesses specialize in helping people resolve their tax problems, often by negotiating with the IRS on your behalf. While the process can be complex, working with a tax relief company may be able to help you get the outcome you need.

Tax attorneys are employed by some tax relief companies who can, in some complicated cases, act as your intermediaries in your negotiations with the IRS.

How Do Tax Relief Companies Work?

There are a number of things that tax relief companies can do to help reduce the amount of back taxes owed. However, it is important to note that many of these same services can be performed by speaking directly with the IRS. There are a few key things that set good tax relief companies apart. Firstly, they employ tax professionals who have years of experience in tax law. This means that they can more easily navigate complicated cases involving higher tax debt amounts. Secondly, good tax relief companies are well-versed in tax law. If you’re behind on your taxes, it’s probably best to just reach out to the IRS yourself. These tax relief companies likely won’t be able to do much that you can’t do on your own.

If you have a complex tax situation with multiple bank accounts, assets, and years of unpaid taxes, a tax relief company can help. They will review your paperwork and identify the best options available. In rare cases, they may be able to negotiate a lower tax bill with the IRS.

There is no hard and fast rule when it comes to negotiating with the IRS over tax debt. However, if your outstanding balance is less than $10,000, you may be better off going it alone. It is common for the best tax relief companies to only work with customers who meet a minimum debt threshold. This is because many companies have minimum tax debt requirements, typically $10,000 or more. Also, if your tax debt is below that amount, paying the IRS in installments could keep you from increasing your overall tax debt load by paying for tax relief services. The best tax relief companies also negotiate with the IRS on their clients’ behalf to reduce or even eliminate their tax debts.

If you’re worried about your taxes, know that you’re not alone. Many people struggle with tax debt and don’t know where to turn for help. Fortunately, there are tax relief firms that can offer you a free consultation to get started. Don’t let your tax debt overwhelm you – get help and take care of it once and for all.

The Most Common Tax Problems

There are a number of potential problems that can arise from mistakes made during the tax filing process, or from not filing a return at all. The following are some of the most common issues that tax relief companies can help resolve:

Back taxes

Back taxes are what you owe the government because you didn’t file your taxes or made mistakes when you did. The interest on these can grow until the tax debt is much more than you can afford, so it’s important to stay up-to-date on the IRS website for the latest information on interest rates for penalties.

You can avoid having to pay back taxes by using tax preparation software. Our article on the best tax software will help you find the right one for your needs.

Wage garnishments

If you owe taxes and don’t pay, the IRS will eventually take action to collect the debt. This may include wage garnishment, where the agency contacts your employer and directs them to withhold a portion of your paycheck until the debt is paid.

Your employer should have received Publication 1494 from the IRS, which outlines how much of your wages can be garnished based on your marital status and number of dependents. Wage garnishment will continue until the debt is satisfied, but there may be other repayment options available through tax relief companies.

Tax liens

This is similar to wage garnishment in that the IRS issues public notice to financial institutions and other relevant parties stating that they will be the first to be paid from any proceeds from sales of personal property.

Tax levies

A tax levy is a more severe variation of a tax lien, which means that the IRS is exercising its right to seize your property for payment of your debt.

Tax audits

The IRS may audit you if they find irregularities in your taxes. However, wealthier individuals are more likely to be audited than those who earn less. This is especially true for those who make $10 million or more per year.

What Are The Costs Associated With Tax Relief?

There is no one-size-fits-all answer when it comes to the cost of tax relief services. The price you pay will depend on the size of your tax debt and the complexity of your case. However, there are two common pricing models that you can choose from: a percentage of the debt owed or flat hourly rates. The most cost-effective option for you will depend on your specific circumstances.

There are many companies that offer a percentage-based payment plan for your tax debt. The rates typically range from 10-15% of the total debt. For example, if you owe $10,000 in taxes, you can expect to pay a minimum of $1,000-$1,500.

When it comes to finding affordable tax relief services, the type of tax relief company you choose to work with can make all the difference. Companies that charge a flat hourly rate may be more affordable if you owe a large amount but your case is relatively straightforward. On the other hand, companies that charge a higher rate may be worth the investment if your case is more complex.

Different services are priced differently by some companies. If you are interested in pursuing tax relief services options such as an offer in compromise (OIC), which allows you to settle your tax debt for a lower amount than originally anticipated, they may charge you a flat fee of $300.

Before you contract a tax relief company’s services, it is crucial that you ask for as much information as possible. This way, you can be sure that you are getting what you expect and that there are no hidden fees. Get quotes in writing, and find out about all available payment options to avoid any surprises down the road.

Options For Tax Debt Relief

There are a few options available to those struggling to pay their taxes. The IRS website has information on these options, or you can speak to a representative over the phone. State agencies may also offer similar programs for local taxes. Contacting a tax relief company is another option, but be sure to do your research before making any decisions.

When it comes to tax resolution services, private companies can only review your case and suggest the best option based on the information they have. They don’t have access to any information that you couldn’t get yourself, and they can’t guarantee a specific outcome.

If you have a complex tax situation, with multiple sources of income and a complex stock portfolio, then you may be better off speaking to the IRS directly.

Offers in compromise

If you owe money to the IRS and cannot pay the full amount, you may be able to settle your tax debt for less than what you owe. This is called an offer in compromise.

The IRS will look at factors such as your ability to pay, income, expenses, and assets to decide if you qualify for an offer in compromise. If the IRS believes that the lower amount is all that can be collected from you “within a reasonable amount of time,” then they may accept your offer in compromise.

However, offers in compromise are not common and most people will not qualify.

Innocent spouse tax relief

If your spouse makes a mistake on your taxes, you may be eligible for innocent spouse tax relief, which can exempt you from any penalties that come as a result. This only applies if the IRS decides that you had no way of knowing about the omission and if it would cause undue hardship.

Installment agreement

If you owe taxes and can’t pay the full amount immediately, you may be able to set up an installment plan with the IRS. With an installment plan, you make smaller payments over time.

There are two types of installment plans: short-term and long-term. A short-term plan is for taxpayers who can pay off their debt within 180 days. A long-term plan is for those who need more time to pay and need to make monthly payments.

There is no specific amount that you must owe in order to apply for an installment agreement. However, online applications are only accepted for amounts up to $50,000 (long-term) or $100,000 (short-term).

Penalty Abatement

The best way to avoid paying penalties on your taxes is to file and pay on time. However, if you do find yourself in a situation where you have incurred a penalty, there may be some tax relief options available to you. One such option is known as “first-time penalty abatement.” This can often be applied to lesser penalties, such as failing to make a payment on a single tax return or missing a filing deadline. To be eligible for this type of tax relief, you generally need to have no penalties for the previous three tax years and have filed If not, at least request a tax extension.

Currently not collectible

If you owe taxes but can’t pay them, you may be able to get what’s called “currently not collectible” or CNC status. This means that both you and the IRS agree that paying your taxes would be unduly burdensome on your living expenses. To apply for CNC status, you generally need to show that paying your taxes would leave you unable to pay for essential things like housing, utilities, food, or other necessary bills.

If the IRS grants CNC status, they’ll review your finances every year to see if your situation has changed. Additionally, any future tax refunds you receive may go towards paying down your debt while you’re in CNC status.

IRS Fresh Start Program

The IRS Fresh Start Program is a set of guidelines that makes tax debt relief more accessible. The program lowers existing requirements to qualify for different IRS tax relief programs, making it easier for taxpayers to get the help they need.

The IRS has made changes to the way income is calculated when determining eligibility for offers-in-compromise. Previously, four years of future income were considered for offers paid in five months or less, and five years of future income was considered for offers paid in six to 24 months. Now, only one year of future income will be considered for offers paid in five months or less, and two years of future income will be considered for offers paid in six to 24 months.

If you’re looking for tax debt relief, there are a few things you should know. First, all offers must be paid in full within 24 months of the date they’re accepted. Second, tax relief companies will evaluate your case and check Fresh Start guidelines to see what options you qualify for.

Other Services Provided By Tax Relief Companies

Audit Defense

If you’re worried about being audited by the IRS, some tax professionals offer audit defense services. For an additional fee, they’ll help you resolve any audits that come up, usually for three years.

Whether or not you decide to use audit defense services is a personal decision. Keep in mind that the IRS only audited 0.45% of individual tax returns in 2019. People earning more than $1 million were more likely to be audited.

Here Are Some Alternatives To Using A Tax Debt Relief Company

Direct negotiation with the IRS

If you owe less than $10,000 in taxes, you may be able to negotiate with the IRS directly. This could be cheaper than using a tax debt relief company. If you feel comfortable completing your own tax returns, explore the different options the IRS offers for payment plans or reducing your debt.

Tax relief lawyers

If you’re struggling with tax debt, you might want to consider working with a tax relief lawyer. They’re more specialized than CPAs or enrolled agents and can be incredibly helpful if your case could lead to criminal charges.

Scam Alert Regarding Tax Relief

If you’re struggling with tax debt, you’re not alone. According to the IRS, over 60 percent of Americans don’t have the money to pay their taxes in full. If you’re feeling overwhelmed by your tax debt, it’s understandable you want to find a tax relief company that can help lower your debt. However, as the FTC warns, not all tax relief companies have your best interests at heart.

Beware of tax relief companies that promise to settle your tax debt in a specific time frame without even looking at your case. Many of these tax relief companies are fraudulent and will simply take your money without doing any work. According to FTC reports, some tax relief companies have even been known to make unauthorized charges to customers’ credit cards long after the case has been closed.

When you’re considering using a tax relief company, be on the lookout for some key red flags. Company representatives who make grandiose promises without knowing the details of your case are one such flag. Another is if the tax relief company demands payment upfront in exchange for supposed guaranteed results. Also be wary if the company initially contacts you via cold calls or unsolicited mail/email, as this could be a sign they are using delay tactics. And finally, if the company repeatedly asks for the same documents, that’s another potential sign of stalling.

There are many tax relief companies out there, but how do you know which ones to trust? A good rule of thumb is to avoid companies that make specific promises, and instead look for those who are transparent about their costs and processes. Additionally, many reputable tax relief firms offer free consultations – so be sure to take advantage of this before making your final decision. Finally, check to see if the tax relief company is accredited with one or more tax professional organizations such as the National Association of Tax Professionals (NATP), the National Association of Enrolled Agents (NAEA), or the Association of International Certified Professional Accountants (AICPA). This will give you peace of mind knowing that you’re working with a reputable, reliable company.