When people find themselves with tax problems, whether it be a tax audit, tax debt that got away from them, or just back taxes that they need to catch up on, it’s often hard to know who to turn to. Surprisingly, many of the most deceiving companies out there in this field are the large firms making big promises on late night tv.
Some people are eligible for large reductions in debt, but many aren’t. Luckily, almost everyone can get some sort of relief if they know what to ask for, maybe a reduction of their penalties, a payment plan, or a special type of payment plan that allows their debt to be partially reduced.
Some things to watch out for when considering a company to help you negotiate tax debt or audits are:
- promises of certain relief before they’ve fully researched your situation. Every program has specific requirements that must be met before you qualify, so they can’t know how to best help you without being familiar with your situation, which usually means getting your tax transcripts, asking about your current financial situation, and reviewing your tax returns, among other things.
- large financial commitments on your part before you know what you’ll be getting from it. They’ll typically charge a fee to analyze your situation, but shouldn’t be billing you for a certain resolution option before they know what you’re eligible for.
- a monthly fee to take on your case. You want the person handling your case to have some incentive to finish it quickly and efficiently. If they get more money the longer it takes, they have incentive to put things off, costing you more in their fees and potentially in extra penalties and interest from the IRS.
- someone who won’t explain the process to you after meeting with them. A tax relief firm won’t know exactly which settlement options you’re eligible for before analyzing your situation, but they should be able to give you an overview of their process and once they have done an analysis, should be able to explain how your resolution option will work and how likely it is to work in your favor.
Don Zabarsky, EA
If you’d like to discuss your specific situation with me, please contact me at: