How Do Tax Relief Companies Work To Reduce Your IRS Debt?
Below are some of the ways that tax relief companies work to reduce your IRS debt.
10/08/2021
Tax relief companies advertise their services and offer to help taxpayers in distress at a fee. If you pay them, these companies can reduce your tax debts and stop back-tax collection by applying for legitimate tax relief programs. Tax relief allows you to break down your debt into smaller payments or reduces the tax you owe the government. It is important to keep in mind that tax relief services will not wipe out your entire tax bill. However, it will make paying what you want a lot more manageable. Here are some ways that tax relief companies work to reduce your IRS debt.
Repayment Plan
The IRS can allow you to break down your balance into smaller payments. For one to qualify for a long-term payment plan, they must owe the government $50000 or less in combined taxes, penalties, and interest. Long-term payment plans include paying your debt over 120 days or longer. To qualify for a short-term payment plan, your tax bill can be as high as $100000. Short-term payment plans involve paying the debt within 120 days or less. IRS payment plans are beneficial if you do not have the money to cover your tax bill in full. However, they come at a cost. Depending on the plan you choose, you may end up paying a setup fee of up to $149 plus penalties and interest.
Offer in Compromise
If you find it challenging to pay your tax bill in full, the IRS can allow you to settle your debt for less than you owe. This is known as an offer in compromise. An offer in compromise can be an excellent option if you cannot pay your full tax debt, or doing so will create a financial hardship. The IRS will consider several factors when reviewing your application for an offer in compromise. Some of these factors include your ability to pay, income, expenses, and assets. You can visit the IRS offer in compromise page on the IRS website to see if you qualify for an offer in compromise. You can also use the offer in the compromise pre-qualifier online to confirm your eligibility.
Tax Consultation
If you have a tax problem, you can consult with a tax relief company. The process will take around 30 minutes. During this time, your company will ask you several questions regarding your tax and financial information to ensure you can benefit from their services. The professional will help you understand your options of paying the debt. Most companies have the knowledge to navigate specific tax issues. As such, ensure that your potential company can solve your particular tax problem.
Interpreting Tax Laws
Most people do not know the specific sections of IRS website pages or IRS forms because they do not understand what they mean. The IRS website may not be clear to people who cannot understand the Tax Code. Tax laws can be complicated and use difficult language. A tax relief company has several experts who can interpret the tax laws for you, help you avoid legalese, and comfortably explain the potential solutions in a clear and easy-to-understand language.
Explain the IRS Process
At times, the IRS’s reasoning may sound like a mystery to the average taxpayer. Even a simple task of contacting the IRS is sometimes complicated. As such, it makes sense to hire someone who can take the stress away from you and take on your tax case from start to finish. A tax relief company knows everything there is to know about the IRS and how they work. They will use this information to determine the best-case resolution for you.
Representation
The
IRS may not take individuals acting on their own
seriously. Sometimes it isn't easy to get a seat
at the table with the IRS without some form of
representation. Some tax relief companies
specialize exclusively in IRS representation.
They will step into your shoes to protect your
assets and negotiate the best solution to your
tax problem.
Stay off the Radar. No one
wishes to be caught in the sight of the IRS. If
you work with a reputable tax relief firm, you
will have your tax problem resolved and have
some knowledge of how to keep the IRS off your
back. This is why your tax relief firm will
always start by addressing the cause of your tax
problem. Not having to deal with the IRS is
always an excellent case scenario.
If
you prefer to have a tax relief company
represent you, always choose a reputable and
qualified tax professional.