Are Tax Debt Relief Companies Valid & Do They Help?

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When you cannot afford to pay your tax debt, you may be tempted to take desperate measures to get rid of the bill. Many people in this situation hire tax-relief companies that claim to be able to get rid of large tax debts. While some of these companies can help, many of them are not legitimate.

Settling the Debt

Most of the companies that offer these tax relief services advertise on television and the radio frequently. You most likely hear these ads often, and they usually make dramatic claims. These companies claim to be able to settle your tax debt with the Internal Revenue Service for a fraction of what you actually owe. They claim that they will represent you when dealing with the IRS, and you will simply have to pay them a one-time fee for this service.

Scams

While some of these companies actually provide service, many of them will take your money up front and then do not provide any of the services that they claim in their advertisements. They might take the money and claim that they can settle your debt for much less than what your account balance is. Then you later find out that they did not file the appropriate paperwork with the IRS and only took your money.

Representing Yourself

Instead of relying on a tax relief company to help you with this problem, you may be better off representing yourself. Instead of letting someone else speak on your behalf to the IRS, you could potentially talk to them directly. This would allow you to explore your options and save the money on the upfront fee to the tax release service. You can then use that money to pay down your tax debt even further.

Options

Instead of hiring a tax relief company to handle this issue, you can explore two different options that the IRS offers. If you cannot afford to pay your taxes in one lump sum, the IRS will allow you to use an installment agreement. This allows you to pay your tax debt over the course of several months in regular payments. The other option that you may have is the offer in compromise. This is a procedure that allows you to settle your tax debt for a low, one-time payment.

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