Pros and Cons of Hiring a Tax Relief Company (2023)

If you’re getting reminders from the IRS about a tax bill you don’t have the money to pay, you’re probably under serious stress. If you’re facing an IRS tax lien or tax levy, it’s probably worse. Hiring a tax debt relief company can be an answer. It may not be the right answer for everyone, but if you’re in trouble with the IRS and have no idea what to do, it’s worth considering.

If you’re wondering whether tax debt relief companies are legit, here’s some good news: some of them are. Here’s some bad news: some of them aren’t. You’ll need to be careful about which one you choose.

Let’s dive into the pros and cons of working with a tax relief company. You’re here because you already know about the power of the IRS, their power to garnish wages or file a tax lien on your property, and it’s reached the point where you need to act.

You’re in the perfect place!

Top 5 Reasons to Hire a Tax Relief Company

If you owe back taxes, you can benefit from consulting with a tax relief company. Think about it. They do this every day and they’ve dealt with just about every scenario imaginable. Instead of letting yourself be overwhelmed, consider these top reasons to leave it to the experts.

1. Free Consultations

A free consultation is a great way to get your questions answered if you’re on the fence about working with a tax relief company. You should get to know the company before you fork over a handful of cash to hire them, right? During your free consultation, you’ll hear about some of the tax relief options, so you know where you stand.

The company will ask you about your situation and customize the solutions to fit your needs, but there’s no obligation to use their services. You can take your new-found knowledge and apply it to a DIY solution if you think that’s your best move.

2. You Get Out of Talking to the IRS

The three scariest letters in the alphabet are I, R, and S. Talking to the IRS as you sift through the options for tax relief is intimidating and it can take a ton of time. But there’s a simple solution.

💡 Quick tip: Once you start an installment plan, you will have a harder time qualifying for a debt reduction request later. We recommend you speak to an expert to see if you qualify for tax relief first.

Hire a tax relief company, and they’ll do all the talking for you! The company will negotiate on your behalf, so you don’t have to feel the stress or spend precious hours on the phone with the IRS.

3. Smoother Negotiations Can Mean a Better Deal

You might not know what to ask for when going over your options with the IRS. If you don’t know the right questions to ask, how can you be sure you’re getting a good deal?

For example, one of the questions you’ll encounter is whether to try for an Offer in Compromise or an installment plan. An Offer in Compromise can actually reduce your tax bill, but only 40% of these offers are accepted. Professional assistance can help you choose the right move with the best probability of success.

4. Access to More Resources

Do you know the ins and outs of the tax code? Probably not. But a tax professional does. Plus, they have years of experience and access to programs, incentives, tips, and tricks that you might not know about. They’ll use their expertise to help you avoid unnecessary fees and penalties, tax levies, and wage garnishments.

5. Faster Results

When you know the system, you know the quickest route from point A to point B. A company that specializes in tax debt relief knows how to navigate the system. They could get faster results than you could on your own.

Examples of Success:

I browsed through dozens of testimonials from tax relief companies to find these.

Benefits Of Hiring a Tax Relief Company:

You might think the only benefit of using a tax relief company would be to help reduce a balance.  But after reading hundreds of reviews of tax relief companies, we’ve discovered that tax relief companies help Americans in a variety of ways:

• provide guidance on audits
• help set up installment agreements with the IRS
• help get current on any unfilled tax returns
• some may be able to stop potential penalties such as wage garnishments

Most importantly, they pause the stress of dealing with the IRS – Typically any case submitted to the IRS takes months (or years) to review.  While waiting for their response, the IRS typically suspends any collection activities, and will often life wage garnishments, as is the case with an Offer in Compromise submission.

What to Watch Out for with Tax Relief Companies

Tax debt relief companies are a great resource. Tapping into years of expertise can be valuable to your situation. But it isn’t all sunshine and rainbows. Even when you work with a legit company, you should be on the lookout for a few things.

1. Getting Help Comes at a Cost

Hiring a tax debt relief company isn’t cheap. You might end up paying between $2,000 to $5,000 for their help. That’s a lot of money! Before you write off the idea of hiring an expert, though, compare the cost to the fees and penalties the IRS can charge you. In the end, getting professional help for your back taxes could be worth the price.

2. Results Might Take A While

While it’s true that a tax relief company can get quicker results, some issues might take a while. If you don’t owe a huge amount and qualify for a payment plan or other tax relief option, your situation could be resolved instantly.

On the other hand… Some tax situations can take months or years to sort out. Just keep one thing in mind. It might be a long journey, but it could be longer if you do it on your own.

3. Some Companies Aren’t Trustworthy

You see it on the news all the time. Tax relief scams cost thousands of people millions of dollars every year. When you need tax relief, not every company is reputable. And some are downright corrupt. But we’ve done the investigating for you. And we have identified some of the best tax relief companies that you can work with.

4. Most Companies Won’t Help You With Smaller Debts

Most tax debt relief companies have a minimum level of tax debt that they are willing to work with That level varies from company to company but is often around $10,000. If you owe less than that it may be hard to find a tax debt relief company that is willing to take you on as a client.

The good news is that for most people with tax debts under $10,000 a DIY approach will be completely adequate.

Does Hiring a Professional for Tax Debt Makes Sense?

Hiring a tax debt relief company isn’t the right move for everyone. If your debt is relatively small or your case is fairly simple, you may choose to do it yourself. Applying for an installment plan on a smaller debt, for example, is a straightforward process you can manage on your own.

If you have larger debts, if you’re confused about what to do or how to respond, or if you are facing enforcement actions like a tax lien or tax levy, turning to a professional might be a better move.

The choice is yours. Learning more about your options will help you to make an informed choice. We hope this article helped!