Do I Need To Hire a Professional Firm to Get Tax Debt Relief?Although some cases are best handled by licensed, seasoned professionals, many can be resolved simply. In fact, most personal IRS tax debts can be cured with a phone call. Many tax resolution firms charge exorbitant fees for services that you can successfully perform on your own. All you need are a few hours of research, preparation and phone time. And while it's advantageous to have years of tax resolution industry experience under your belt when navigating toward the resolution of your liabilities, you can do just fine on your own.
But should you decide to hire a professional to help you resolve your tax debt, it's a good idea to research your resolution options directly with the IRS. That way you'll have a better idea of what you do and don't need before handing a pile of your hard earned money over to Johnny Tax Pro.
Remember, some firms charge thousands of dollars for a resolution that takes them an hour or 2 of total work. But when you know what you need and the basics of how to get it, you'll make a better decision when it comes to hiring the right company to help you.
What Can I Expect From a Tax Resolution Company?As if you hadn't noticed, tax resolution companies are everywhere, each with wildly varying levels of competence and integrity. And choosing the right firm to fit your needs can be challenging. After all, it's your wallet on the line. Here are a few red flags to consider:
- Guarantees - There are very few guarantees that a tax resolution firm can make prior to looking into your case with your written authorization. Even after submitting IRS Power of Attorney and investigating your case there are few guarantees because in the end, the IRS makes most of the decisions.
- Flat Fees - Most flat fees are contingent upon something, whether it be your participation or on a set amount of days spent on your case. This isn't completely unreasonable, but some companies say one thing and do the exact opposite. Be sure to read a firm's contract carefully. Some firms verbally promise flat fees, but their contracts clearly outline hourly rates. A flat fee can be a good thing, because it encourages your tax pro to work hard to resolve your tax debt. While hourly fees or continuous monthly fees can be dangerous because they don't encourage resolution, but rather unnecessary work and stalling tactics to bill more hours and take more time.
- Promises - As with guarantees, there are few (if any) promises that can be kept in tax resolution. This is especially true before Power of Attorney is filed with the IRS. Remember, a salesman that hasn't talked to the IRS about your case is basing his or her promises of reduction and resolution on assumptions about your case and tax history. Sometimes the truth isn't what you want to hear, but it's always the best medicine when you have a tax debt. Promises about your case's outcome can cause serious anger and disappointment when it doesn't happen.
How Do I Choose The Right Tax Resolution Company For Me?This is a difficult question to answer, unless you take the proper steps to make sure you are hiring a good company. And, it will take a little bit of work. The steps below will get you started:
- Check the BBB for an A rating. The fewer complaints the better;
- Check for length of time in business. 5 years or more is optimal;
- Check for licensed tax professionals and ask to speak with the person who will be on your Power of Attorney;
- Make sure your case won't be outsourced to another company or individual;
- Ask the right questions. Will I be charged more money? For what reasons? How many cases have you resolved? How big is your company? Tell me about a time when your company couldn't resolve a client's case. What happened? What is each step in your company's process?
- Call your prospective tax resolution firm's references and ask questions: Were you charged more money? Were you surprised by anything, good or bad? How often were you updated during the process? Were the steps explained throughout the process? Was the staff helpful and understanding?
- Be sure to know your role in the resolution of your tax debt, and the manner in which you and the firm you choose will interact and work together;
- Beware of gimmicks. Don't be baited by a low fee or a promise of tax reduction. Remember, tax resolution firms need to make money and don't make decisions for the IRS.