Tax Relief Services
The threat of what could happen if you do not pay your taxes can lead some to take drastic measures. One tactic that many use is hiring a tax relief company to help with their outstanding tax debt. While this could provide some relief from tax problems, it can often lead to further issues.
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Tax Relief Companies
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There are a number of tax relief companies in the market that try to get customers to hire them. You have most likely seen some of their advertisements on television. Most of the time, they claim to be able to settle your tax debt for a fraction of the total amount that you owe the Internal Revenue Service. These companies are typically composed of accountants, lawyers and former IRS workers. They offer to look at your tax problem and represent you in dealings with the IRS.
Tax Relief Scams
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While there are some legitimate companies in this industry that truly have your best interests in mind, many of the companies are scams. Many consumers have been taken advantage of by these companies in recent years. For example, they will charge a large upfront fee for their services and then not deliver on their promises. When this happens, you will still have the tax debt to worry about, but you will have given what little money you did have to a tax relief company that did not help you.
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Offer in Compromise
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The technique that most of these companies use is called an offer in compromise. With an offer in compromise, they make an offer to the IRS to settle your debt for a one-time lump sum payment. The IRS can evaluate your case and decide whether they want to accept the offer. This makes the process of tax relief very unpredictable because the IRS is the one who gets to decide. You can even do this yourself by filling out a form you can get from the IRS.
Choosing a Company
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If you do not want to handle this process yourself and are intent on hiring a tax relief company, choose a good one. Do some research to find out exactly what the company has to offer. Check with the Better Business Bureau to find out if the company you are considering has any complaints against them (see Resources 1). If the company charges an upfront fee, you should be very skeptical about working with them.
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