Best Tax Relief Companies

Methodology

We narrowed down the best tax relief companies for you by comparing costs, tax debt requirements, availability and customer reviews. All of the companies featured offer free consultations, so reaching out for a clearer idea about pricing could help you choose the right company for your situation.

Our picks may be Authorized Partners who compensate us. This does not affect our recommendations or evaluations but may impact the order in which companies appear.

Owing the state or the IRS taxes can be overwhelming, but you don't have to tackle the nuances of the tax code alone. A reputable tax relief company can negotiate with the IRS and local authorities on your behalf, potentially reduce the amount of back taxes you owe and help you set up manageable payment plans. Tax relief companies offer several resolution options, including offers in compromise (OICs), installment agreements and penalty abatement, among others.

In this guide, you’ll learn how tax relief services work, which tax relief options are available to you and how a tax relief company can help you negotiate with the IRS and potentially reduce your overall tax liability.

What to do when you owe back taxes

When you owe more taxes than you can afford or don’t pay the full amount, you will owe back taxes. If you owe the IRS or local taxing authorities, you will need to make arrangements to repay or reduce the debt. You will not be able to reschedule the debt, but you can set up a payment plan.

“Most of the time, the IRS sends letters to taxpayers due to proposed reductions to their tax refunds or additional amounts owed,” said Kevin Matthews, an accounting professor at the George Mason University School of Business.

“Not addressing these notices can be risky, as the IRS usually will make the reduced credit or additional expense stick, leaving the client with a bill that they shouldn’t have to pay. Furthermore, they can levy money if the amount is not paid, and/or the IRS can also put a garnishment on payments or wages received to get their taxes paid.”

What is tax relief and how does it work?

Tax relief is any reduction or removal of liability in taxes owed by an individual taxpayer or business entity. Tax relief companies employ tax experts, including tax attorneys, certified public accountants (CPAs) and enrolled agents, who serve as intermediaries between their clients and the government. These tax experts work with the IRS or your local tax authority to find ways to resolve your tax debt.

If you didn’t file a tax return, misfiled your return or were unable to pay taxes, you may end up owing a tax debt that accrues penalties and interest. Many people facing this tax burden do not have enough liquid assets to pay the full amount at once and require assistance. Tax relief companies can help reduce the amount you owe to the IRS or state tax agencies.

When you work with a tax relief company, its professionals negotiate a tax relief program for you. Some IRS tax relief programs remove improper tax liabilities. For example, innocent spouse relief shields one spouse from the tax, interest and penalties that result from the other spouse's erroneous tax return. Other services, like the release of wage garnishments, stop the IRS from seizing your wages or assets to pay back taxes.

How much does the IRS or state agency usually settle for?

How much the IRS or state agency will settle for depends on how much you owe and how much the IRS deems you can afford. In some cases, the IRS will not settle or accept an OIC, and the taxpayer will be responsible for their full tax debt.

In 2022, 36,022 OICs were proposed to the IRS to settle existing tax liabilities for less than the full amount owed. The IRS accepted 13,165 offers, amounting to more than $234.3 million of settled debt that taxpayers were no longer responsible for.

Types of tax debt relief services

Most tax relief companies or attorneys offer the following services to help you reduce or manage your tax debt.

How to choose a tax relief company

When considering if a tax relief company is a good fit for you, do the following:

• Check a company’s track record: How long has the company been in business? How many customers has it helped? Is it an accredited company by NATP or NAEA? Read unbiased reviews on several different sites to get a feel of how customers are treated and if their tax debt was resolved in a reasonable amount of time.
• Get a customized plan: A tax relief company should take the time to sit down with you for a free consultation and give you a customized action plan and estimated timeline. You want to work with individuals who treat your case like it's one of a kind.
• Know who is working on your case: There are many different titles in the tax profession, but not all of them are equipped to handle every type of tax debt. Tax attorneys are able to handle difficult cases, whereas a public accountant might not have experience in dealing with tax debt issues. Understand who will be working on your case and what makes them qualified to do so. For more extreme cases of tax debt, a tax attorney may be a better fit than an enrolled agent.

Due to the uniqueness of each person’s tax debt situation, many companies do not publish service fees online. However, after a free consultation, the company should be very transparent about how much it will charge and when.

» MORE: How to choose a financial advisor

Tax relief scams to watch out for

When choosing a tax relief company, you need to be cautious of scam companies that overpromise, overcharge and underdeliver results. Here are some red flags to watch for:

• A company that asks for full payment upfront before any work is done
• Promise of guaranteed results
• Pressure to make decisions
• Unsolicited calls or emails
• Lack of credentials
• Vague communication

How much does tax relief cost?

Tax relief companies might charge as little as $250 for penalty abatement or upward of $10,000 for an OIC case. Generally, the price of tax resolution services varies based on the complexity of the case.

After a free initial consultation, tax relief agents usually charge a $400 to $600 setup fee. Tax relief companies vary on how they bill clients after this, however. Tax resolution fees can be based on billable time, your debt level or a flat fee.

Using a tax resolution company does not guarantee results or money-saving benefits. It is important to get a clear understanding of how much a tax resolution company will charge and how long it estimates the process to take before you begin.

Additionally, knowing upfront about how to cancel services and refund options can help you avoid potential problems later on.

Pros and cons of tax relief companies

Tax relief companies can be useful for those drowning in tax debt. Tax relief companies often have tax professionals on staff who understand the intricacies of tax laws and IRS procedures. On the other hand, while tax relief companies can help negotiate with the IRS, there's no guarantee that they'll be able to reduce your debt or arrange an affordable payment plan.

Consider these pros and cons of working with a tax relief company.

Additional tax relief services

Some tax relief companies will offer additional services that can help individuals or companies stay compliant with future taxes. Some services include:

• Audit defense: Many tax preparation companies provide assistance in the event that your tax return is audited by the IRS or state taxing authority. When you opt for audit defense, the company will represent you in front of the IRS and ensure you don’t get into further trouble.
• Bookkeeping: Bookkeeping involves recording all financial transactions, including purchases, sales, receipts and payments. A good bookkeeping system helps to track income and expenses, which ensures accurate financial records come tax time.

» MORE: How to file an extension for taxes

Tax relief program alternatives

Before you call a tax relief service, make sure you fully understand where you stand with the IRS, especially if this is your first year of receiving a letter.

For minor tax debt cases, you might be able to tackle the problem on your own. Here are some alternatives to try before using a tax relief program.

• Set up an online payment plan with the IRS: You can apply for a short-term or long-term payment plan through the IRS if you cannot pay your whole tax bill upfront. For those who owe under $50,000 in tax debt, the IRS can approve you for a payment plan of over 180 days to help.
• Take out a loan: If possible, it can be less expensive in the long run to pay your tax bill in full by taking out a personal loan or a home equity loan. This avoids the extra costs of penalties and interest charged by the IRS. 
• Amend your tax return: If you believe there's an error on your tax return that has led to an inflated tax bill, you can file an amended return. If the IRS agrees with the changes, this could reduce your tax liability.

» MORE: Best tax software and services

How do tax relief customers rate the experience?

We analyzed three years of consumer ratings on our site and calculated an overall satisfaction for tax relief companies of 4.5 stars.

More than 4 in 5 of the reviewers in our analysis were happy or satisfied with the tax relief experience, while only 18% were upset. Companies that we chose as our top picks in this guide all have an overall satisfaction rating of 3.9 stars or higher.

Other key takeaways from our analysis of tax relief companies on ConsumerAffairs include:

• The quality of staff is important to tax relief customers. Our analysis found that reviewers talk about staff more often than other aspects. Three in 4 mentions of staff are positive, correlating with high overall satisfaction more than any other factor. Dealing with tax debt is a personal and stressful situation, so having an honest and supportive team is crucial.
• Tax relief customers are most likely to comment negatively about the cost of service. We recommend using a free consultation to fully understand how long you will be paying a tax relief company to resolve your tax debt.

We also examined 1-star reviews on our site from several tax relief companies. The most common complaint was that many individuals paid $3,000 to $10,000 for tax relief and had no results. Another common complaint was how long it took to see results — some individuals said it took up to two years to get a resolution.

To make our selection for the top tax relief companies, we collected 17 individual data points from 20 tax relief companies and tax lawyers. We also analyzed over 2,000 customer reviews and overall ratings from ConsumerAffairs readers who have been tax relief company customers.

Customer ratings and experience are most important to us when we’re choosing companies to recommend to people seeking a tax relief company. However, companies with no recent positive ratings on ConsumerAffairs also made our list of top picks because they excel in the other most impactful factors we measured.

• Fees and fee transparency: We considered which companies listed their fees or had reviews that reflected positively on fee transparency. Additionally, more weight was given to companies that offered free, no-pressure tax debt consultations.
• Availability: The majority of our top picks can help customers across the nation, even if there are limited physical locations.
• Customer service: We considered whether the company offered customer service via multiple channels (in-person locations, telephone and live chat) and which languages it offered assistance in as well as the number of positive reviews it had from ConsumerAffairs readers.