Best Tax Relief Companies in Delaware

Picking a tax relief company in Delaware requires more than just a quick online search. You need to be strategic and thorough, considering factors that go beyond price alone. Here are the most important things to think about when you choose a tax relief company in Delaware:

1. Check credentials and licensing

Always ask to see credentials before you sign up. You can verify enrolled agents on the IRS website and check CPA licenses with the Delaware state board. If a company refuses to provide proof of credentials, consider it a warning sign.

2. Compare fees and payment structures

Tax relief pricing isn’t always straightforward. Some companies charge flat fees per service, others bill by the hour and a few base their fees on the amount of tax debt you owe. It’s important to get quotes from multiple providers, with a breakdown of what is included. Remember, cheapest isn’t always best.

Read the contract carefully before signing — watch for auto-renewal clauses.

3. Read reviews and check complaints

Customer reviews reveal a range of experiences with tax relief companies. Here are the most common complaint categories to watch for:

• Poor communication and unresponsive representatives: Many clients report that after signing up, it becomes difficult to reach their assigned rep. Calls and emails may go unanswered, and clients can go weeks or longer without status updates.
• Multiple representative changes and lack of continuity: Some customers experience frequent changes in who is handling their case, which can lead to confusion, repeated explanations and even missing or misplaced documents.
• High fees with minimal results: Reports often reflect that customers paid thousands for services, only to end up with basic payment arrangements they could have set up themselves, without seeing any reduction in their tax debt.
• Aggressive upfront sales tactics followed by service delays: Some companies are very persistent and attentive before taking your payment, but once fees are collected, communication slows and the case may stall for months or years.

  Laura from Claymont ran into this, although she got lucky in that the reps had strong follow-through: “My husband initially took the call from them. They were aggressive, but they were also good about following up and presenting things.”

• Requesting the same documents repeatedly: Clients are sometimes asked for the same forms or documents multiple times. Companies may claim they never received them, even when proof of delivery exists.

A handful of complaints is fairly common. How a company responds to them is what matters most.

4. Verify experience with your type of tax debt

Tax debt comes in many forms — wage garnishments, business taxes, payroll tax issues and more. Not all firms have experience with every scenario. Ask prospective companies about their track record with cases like yours and see if they can provide relevant examples.

5. Consider a local Delaware firm vs. a national company

National companies can handle federal issues, but may lack in-depth knowledge of Delaware-specific tax matters. Local professionals may provide more personalized attention and state-specific expertise.

Both can be effective, but if your problem is mainly state tax debt, a Delaware-based firm may be more familiar with local laws and procedures.

6. Ask about the consultation process

A reputable company will offer a no-cost initial consultation where it reviews your situation and options. Beware of firms that rush you or push you to sign up before understanding your case. A trustworthy professional will walk you through the process and set realistic expectations.

7. Understand what's guaranteed (and what's not)

No tax relief company can promise a specific outcome before reviewing your case with the IRS or Delaware Division of Revenue. The company should only guarantee its processes, communication standards and typical timelines.

If you’re promised a particular result — such as settling for pennies on the dollar — before your finances are analyzed, that’s a sign to look elsewhere.

» COMPARE: Top-rated tax relief companies

Tax relief refers to the process of addressing back taxes or other tax debt through negotiation, payment plans or settlements with federal or state tax authorities. It’s about finding an affordable way to resolve what you owe, reduce penalties or prevent collection actions like wage garnishments and asset seizures.

The term "tax relief" covers several solutions. The right solution depends on your income, assets and how much you owe.

"Pennies on the dollar" promises are the #1 red flag in this industry.

Common tax problems that require relief

Most people need tax relief when they’re facing serious enforcement actions or mounting penalties. These common problems include:

• Wage garnishments
• Bank levies
• Property liens

These actions can create immediate financial hardship and require urgent attention.

Other tax challenges that lead people to seek help:

• Years of unfiled returns
• Payroll tax issues for business owners
• Penalty amounts that exceed the original tax owed
• Life events (divorce, unemployment, medical emergencies) that affect your ability to pay

Common Delaware tax problems

A common tax issue in Delaware is for businesses that are incorporated in the state but do not conduct business there. These entities must still comply with Delaware's franchise tax requirements, which can be a source of confusion and potential non-compliance.

The Delaware Division of Revenue has a Criminal Investigation Unit that investigates allegations of tax fraud. For civil matters, if a tax bill is not paid, the Division can file a Notice of Judgment, which acts as a lien and allows for the seizure and sale of property to satisfy the debt.

» LEARN: IRS programs for back taxes

How does tax relief work in Delaware?

The tax relief process typically takes months and includes several phases. Here’s how it works for most Delaware residents:

1. Initial consultation and case evaluation

Your tax relief company will first review your complete tax situation. This includes looking at your IRS transcripts. It will check unfiled returns, current income and monthly expenses.

Next, the company will calculate your reasonable collection potential. That's what the IRS believes you can afford to pay. This number determines whether you qualify for tax relief and which options you qualify for. The evaluation usually takes one to two weeks after you provide all required documents.

2. Negotiating with tax authorities

Your company will contact the IRS on your behalf. This is where having licensed pros matters. Only enrolled agents, CPAs and lawyers can represent you in negotiations.

Your rep will propose a solution based on your money situation. This might be an offer in compromise, an installment agreement or a currently not collectible status. The IRS will review your proposal and may ask for more documents.

3. Resolution and payment plans

If the IRS accepts your proposed solution, you'll enter a resolution phase. For payment plans, you'll start making monthly payments. For offers in compromise, you'll pay your settlement amount and follow the agreed terms.

Your tax relief company should help you stay compliant during this phase. That means filing all future tax returns on time and paying any new taxes you owe. Breaking these terms can void your agreement.

Delaware vs. federal tax relief

Federal tax relief deals with debts you owe to the IRS. This includes income taxes, payroll taxes and other federal debts. Most tax relief companies focus mainly on federal debt.

Delaware tax relief involves debts owed to the Delaware Division of Revenue (DDR). This includes state income taxes, sales taxes or other state debts. The process is similar to federal relief, but each state has its own rules, programs and negotiation practices. Some states are more flexible than others.

For information on tax relief options, taxpayers should contact the Delaware Division of Revenue directly at 302-577-8200 or visit the DDR website.

How long does tax relief take?

Simple cases can be quick. Setting up an IRS installment agreement can take 30 to 60 days. More complex situations take longer. For example, offers in compromise usually take six months to a year or longer.

Several factors affect the timeline:

• How quickly you provide documents
• How backed up the IRS is
• How much extra information is requested
• How many years of unfiled tax returns you have
• Whether the tax debt is personal or business (business usually takes longer)

Tax relief services usually cost between $2,500 and $7,500 for most cases. Simple matters cost less, while complex negotiations can cost quite a bit more. Setting up a payment plan is much cheaper than getting an offer in compromise, for example.

Your final cost depends on:

• How complex your case is
• How much you owe
• What type of resolution you’re seeking

The Delaware Division of Revenue does not charge a state filing fee for its Offer in Compromise program. This makes it more accessible for taxpayers facing financial hardship to apply for a settlement compared to the IRS, which charges a $205 fee for its federal OIC program.

Flat fees vs. hourly rates

Flat fees are the most common pricing structure. You pay one set price, and the company handles your entire case from start to finish. This makes budgeting easier because you know the total cost upfront.

Hourly rates are less common, but some firms use them for complex cases. Rates usually range from $200 to $400 per hour, depending on who you work with.

The average hourly rate for a lawyer in Delaware was $344 in 2023. The cost of hiring a local tax professional will be influenced by the complexity of the case, the professional's experience and the specific metropolitan area within the state.

Percentage-based fees

Some companies charge a percent of the tax debt you owe or charge a percent of what they save you. This model is controversial. Most reputable firms avoid percentage-based pricing.

Hidden fees to watch for

Some companies advertise low prices. Then they add fees for services that should be included. Watch for charges for basic tasks, including:

• Getting IRS transcripts
• Filing a power of attorney form
• Making phone calls to the IRS
• Admin fees
• Document prep fees
• Meeting fees beyond the first meeting

A good tax relief company should include all standard services in its quoted price. Get everything in writing before you sign a contract.

Payment plans for tax relief services

Most tax relief companies offer payment plans that let you pay their fees over several months.

Make sure to review the terms of the payment plan carefully. Some require you to finish paying before the company starts working with the IRS. You could end up paying thousands in fees, with no progress on your case. Look for companies that begin work after a reasonable down payment.

The IRS offers several programs that help taxpayers resolve their debt. Each option has specific requirements and works better for different situations.

Offer in compromise (OIC)

An offer in compromise lets you settle your tax debt for less. The IRS sometimes accepts these offers because it believes you can't pay your full debt within the collection period.

Getting an OIC approved is hard. The IRS only accepts about 25% of requests. You need to prove you can't pay by showing your income, expenses, assets and future earning potential.

What to know: Most people don't qualify for an OIC. That's why companies that promise "pennies on the dollar" settlements are usually misleading.

Installment agreements

Installment agreements let you pay your tax debt over time with monthly payments. This is the most common form of tax relief (and the easiest to qualify for).

The IRS offers several types of installment plans. Short-term plans give you up to 180 days to pay. Long-term plans can extend up to 72 months.

The Delaware Division of Revenue may consider informal payment plans for taxpayers who cannot pay their liability in full. However, there is no formal application process or standardized program. Taxpayers must contact the Division of Revenue directly to negotiate any potential installment agreement.

What to know: If you owe less than $50,000, you can often set up a plan online without the need for extensive financial documents.

Currently not collectible (CNC) status

Currently not collectible status temporarily stops IRS collection efforts. This happens when you can't afford to pay anything toward your tax debt. The IRS agrees that collecting from you would create financial hardship.

CNC status doesn't make your debt go away. Interest and penalties continue to grow. The IRS will review your money situation from time to time, and when your income improves, it will restart collection efforts.

What to know: This option works best if you're facing temporary hardship and expect your situation to improve.

Penalty abatement

Penalty abatement removes or reduces penalties that were added to your original tax debt. The IRS charges penalties for:

• Filing late
• Paying late
• Understating your tax liability

What to know: You can request penalty abatement if you have reasonable cause. You need a reason for not meeting your tax duties. Valid reasons include:

• Serious illness
• Natural disaster
• Death in the family
• Relying on incorrect IRS advice

Innocent spouse relief

Innocent spouse relief protects you from tax debt caused by your current or former spouse's actions. This applies in certain situations where your spouse:

• Underreported income
• Claimed false deductions
• Caused a tax problem without your knowledge

You must prove you didn't know about the tax error. The IRS also looks at whether it would be unfair to hold you liable.

What to know: This relief is most common in divorce situations. It also happens in cases of financial abuse.

Lien and levy release

A tax lien is a legal claim against your property when you owe taxes. The IRS files liens with local courts. This damages your credit and makes it hard to sell property or get loans. A tax relief company can help get liens withdrawn by setting up a payment plan or other resolution.

A levy is different. This is when the IRS actually seizes your property, wages or bank accounts to pay your debt.

If a tax bill is not paid, the Delaware Division of Revenue can also file a Notice of Judgment, which acts as a lien on all of a taxpayer's property. This can harm credit and lead to enforced collection actions such as wage garnishments, bank levies and the seizure and sale of assets, similar to the IRS.

What to know: A tax relief company can get levies released if the seizure creates immediate economic hardship.