Find the Best Tax Relief Companies

Tax relief is any reduction in taxes owed by an individual taxpayer or business entity, including tax deductions and tax credits. For example, a tax credit can incentivize homeowners to make energy-efficient repairs, and a tax deduction can decrease the overall tax burden for those affected by a natural disaster.

People who owe a tax debt often seek tax relief to reduce the amount they owe to the IRS or state tax agencies. Those who didn’t file a tax return, misfiled their return or were unable to pay taxes 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 resolution companies specialize in tax reduction strategies to resolve back tax debt and unfiled returns, including installment plans. IRS debt tax relief professionals also negotiate with the IRS and state tax commissions on behalf of their clients.

Tax relief companies employ tax experts, including tax attorneys, certified public accountants and enrolled agents, who serve as intermediaries between their clients and the IRS. These tax experts work with the IRS to find ways for consumers to resolve their tax debt. IRS debt help experts also help consumers by negotiating tax relief programs, tax debt settlement agreements or tax debt installment agreements.

The IRS offers several tax debt relief programs. Taxpayers can apply for tax relief from the IRS directly or hire a tax relief company to help negotiate on their behalf. If you owe a tax debt of more than $10,000, it’s smart to hire a tax relief professional who has experience negotiating with the IRS.

Seek professional tax relief help if you owe more than $10,000

When you work with a tax relief company, its professionals negotiate a tax relief program for you. Some IRS tax relief programs, like innocent spouse relief, remove improper tax liabilities. Others, like the release of wage garnishments, stop the IRS from seizing your wages or assets to pay back taxes.

Tax relief companies use different types of contracts — some tax relief companies require clients to sign a contract, while others do not require customers to sign any paperwork and allow them to start and stop work at their discretion. Any contract you sign with a legitimate tax relief company should clearly define the scope of the work, the payment schedule and how you’re billed.

Common tax problems

If you have a tax debt, you should attempt to pay the balance as quickly as possible. Unpaid tax bills collect interest and monthly penalty fees. If you can’t pay everything you owe at once, negotiate with the IRS to come up with an installment plan. The IRS is patient — and even flexible — if you make an effort to set up a payment plan. Ask a tax relief company for help if you need assistance with tax problems, including:

You can use tax relief programs to set up a payment plan or negotiate a tax debt settlement with the IRS. Remember, tax relief isn’t about avoiding your tax obligation — it’s about making it easier to pay off your existing tax debt. Tax relief companies specialize in negotiating back tax debt relief plans on a client’s behalf.

Offers in compromise

Depending on your circumstances, an offer in compromise may be the smartest way to handle your tax debts. An offer in compromise shrinks your tax liability based on what the IRS determines you can realistically pay. 

In order to qualify for an offer in compromise, you must meet the IRS’s eligibility requirements and complete its online application. To determine what percentage of your tax bill you can pay, the IRS has you take a means test to assess the following aspects of your situation:

• Your income
• Your physical assets
• Your expenses

The application fee for an offer in compromise is $205, but some people may qualify for low-income certification. A tax relief company can help you apply for an offer in compromise, or you can do it yourself. If you have a complicated tax situation, it’s a good idea to hire a professional.

It can take the IRS anywhere from four weeks to eight months to accept an offer in compromise, but it often agrees to offers in compromise if there is legitimate doubt about whether the taxpayer is liable for the taxes owed or if it’s unlikely the agency can collect the tax debt. Once you agree to an offer in compromise with the IRS, you have two years to repay the amount and two payment options to choose from: a lump-sum payment or monthly payments.

Innocent spouse relief

You could qualify for innocent spouse relief if your spouse or former spouse omitted or improperly reported items, including capital gains, on your joint tax return. Innocent spouse relief only applies to tax debts on individual income or self-employment, and you must request relief within two years of the date the IRS attempted to collect the amount from you. If innocent spouse relief doesn’t fit your tax situation, there are two other forms of joint tax relief:

• Separation of liability relief provides for the separate allocation of your taxes from a spouse you’re no longer living with or your former or legally separated spouse. If your spouse incorrectly reported something on your joint tax form, you’re only required to pay the tax amount allocated to you by the IRS.
• Equitable spouse relief provides an allocation or deduction of tax debt if your spouse made an error on a joint tax return or the amount of tax reported is correct on your joint return but wasn't paid with the return. Unlike innocent spouse relief and separation of liability relief, you don’t have two years to request equitable spouse relief — it must be requested at the time of collection.

Installment agreement

An installment agreement is a tax repayment plan offered by the IRS that lets people pay their unpaid taxes in monthly installments. The IRS offers long-term installment agreements and short-term payment plans, and both plans have different requirements. 

To apply online for a short-term payment plan (less than 120 days), you must have less than $100,000 in tax liability, including penalties and interest. To apply online for a long-term installment agreement, you must have less than $50,000 in tax liability, including penalties and interest. If you owe more than $50,000 in tax debt, you are not eligible to apply online and may be required to submit additional forms.

An installment agreement is guaranteed if you owe less than $10,000 and can pay off the full amount within three years. 

Penalty abatement

Tax penalty abatement waives a penalty the IRS has issued to a taxpayer. These penalties are often given for failing to file taxes on time or missing a tax payment. You might qualify for penalty abatement if you were penalty-free for three years before receiving the penalty you’re attempting to have waived. You might also be eligible if you filed an extension request or if you paid or plan to pay the amount due. Because failure-to-pay penalties grow over time, you should pay off the penalty before requesting the penalty abatement. If it is granted, you receive a rebate.

Currently Not Collectible

Currently Not Collectible status, also called a hardship extension, can be used to stop an IRS lien, levy, seizure or termination of an installment agreement. The IRS only declares a taxpayer Current Not Collectible if the taxpayer has no way to pay their debt while still paying basic living expenses. 

Once you receive Currently Not Collectible status, the IRS reviews your case annually to determine whether your financial situation has changed. Any refunds you qualify for may be seized by the IRS and applied to your outstanding tax debts.

IRS Fresh Start Program

The IRS Fresh Start Program is a streamlined installment plan that makes it easier for individuals and small businesses to pay back taxes while avoiding tax liens, interest, penalties, garnishments or seizure of assets. It began in 2011 for taxpayers who owe less than $50,000 and earn less than $100,000 per year, but the IRS expanded the program to include more flexible terms. 

To qualify for the IRS Fresh Start program, you must have filed all of your tax returns and not entered into another payment plan in the past five years. Those who have filed for personal bankruptcy are also disqualified.

On average,
tax relief costs
$2,000 - $7,000

Tax relief costs range from $750 to $10,000 or more, depending on your tax debt circumstances. Generally, the price of tax resolution services varies based on the complexity of the case.

A case of average complexity typically ranges from $2,000 to $7,000. Complicated tax situations are more expensive because they require additional work and documentation from the tax relief company. Highly complex tax relief cases cost up to $8,000 or more to resolve. Tax relief companies might charge as little as $250 for penalty abatement or upwards of $10,000 for an offer in compromise (OIC) 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 time-based, debt-based or a flat fee.

• Time-based fees are charged on an hourly rate, and the total cost is based on how long it takes the tax relief company to handle a client's case.
• Debt-based fees are set based on a percentage of the total tax debt the client owes.
• Flat rates are set based on the service and do not change regardless of the size of the debt or how long it takes the tax relief company to perform that service.

Tax relief companies provide a wide variety of tax relief options to help people with unpaid taxes. These companies employ trained professionals who help you with multiple services, including negotiating tax debt. When you work with a tax relief company, the company creates a tax relief program for you that combines the following types of tax help services:

Nobody likes dealing with the IRS, but the longer you wait, the larger your tax debt becomes. Some different tax debt resolution options to pay off the IRS in full or partial payments include:

• Lump-sum payment: If you owe money to the IRS, it’s always best to pay in full to minimize interest charges and penalties. If you can’t make the whole payment all at once, you could qualify for an extension of up to 120 days.
• Payment plan: If you can’t pay everything you owe immediately, you can negotiate with the IRS to come up with a short- or long-term payment plan.
• Credit cards: You can pay federal taxes with a credit card. The IRS doesn’t accept direct credit card payments, but there are licensed payment processors that accept credit card payments on the IRS’s behalf. Be aware that these companies charge a fee to settle tax debt with a credit card. You must also pay interest to your credit card issuer until you pay back the amount.
• Bankruptcy: Filing for Chapter 7 bankruptcy can discharge income tax debts under certain conditions. The debt must be at least three years old, you must have filed a tax return and the IRS must have assessed the debt within 240 days before you file for bankruptcy.
• Statute of limitations: Generally, the IRS collection process on taxes, penalties and interest has a 10-year statute of limitations. The 10-year period starts on the date of your tax assessment. If IRS tax debt forgiveness after a decade sounds too good to be true, keep in mind the period can be suspended multiple times and may last much longer. 
• Hire a tax professional: If you owe more than $10,000, it’s smart to hire a tax relief professional with expert knowledge of how to negotiate with the IRS. The average cost of a tax attorney ranges from $750 to $10,000 or more, depending on the complexity of your case.

We compared the best local tax relief companies across the United States to help you find trusted tax relief services in your city.

• Albuquerque
• Atlanta
• Austin
• Bakersfield
• Baltimore
• Boise
• Buffalo
• Chicago
• Cincinnati
• Cleveland
• Colorado Springs
• Corpus Christi
• Dallas
• Denver
• Detroit
• Fort Myers
• Green Bay
• Houston
• Indianapolis
• Kansas City
• Lafayette
• Lansing
• Las Vegas
• Lexington
• Los Angeles
• Milwaukee
• Missoula
• Nashville
• Omaha
• Orlando
• Phoenix
• Pittsburgh
• Portland
• Sacramento
• San Antonio
• San Diego
• Santa Barbara
• Tallahassee
• Tucson
• Tulsa
• Waco
• West Palm Beach