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Tax Relief Services: What to Expect With A Tax Relief Company

If you have tax debt, 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 off your back in regards 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. This typically lasts about 30 minutes. During the consultation, a tax professional will ask you questions about your situation. Then, he explains some options.

After You Chose a Tax Relief Firm

Once you choose a firm, 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 the tax relief company to complete a tax compliance check in order to find out the services you would need and/or qualify for.

The IRS generally won’t work with you unless all past returns are filed. Therefore, it is important for the tax relief company and their licensed tax professionals 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 or tax relief services you can pursue after a licensed tax professional reviews previous tax returns, IRS transcripts and/or wage and income transcripts–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 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 case.

The licensed tax professional finds the most practical tax relief solution for your situation. This may be:

  • 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

The goal is to balance what the IRS will accept with your personal 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, you can rest assured everything is moving in the right direction.

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). Then, you no longer owe anything. The IRS is completely 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 a resolution is set up an guidance has been given, the licensed tax professional will generally withdraw the power of attorney with the IRS.