“I hate paying taxes. But I love the civilization they give me.”
Oliver Wendell Holmes
Death and taxes – it’s unclear which is more feared by the American public. Yet, both come to us all. Unfortunately, taxes are a necessary evil: the $3.7 trillion collected annually by the US government is used to pay for major health programs, education, technology and a number of things down to the roads we drive on and our street lighting. If you don’t pay what you owe, you are liable for fines and could end up with a prison sentence.
The tax system in this country sometimes seems like it’s specifically designed to dupe us; to leave even the most intelligent person frustrated and drooling after trying to manage their tax returns and wondering where all their money is going. However, there is light to be seen at the end of this tunnel, in two short words – tax relief. So, what is this elusive thing and how can you get it?
What is tax relief?
It is any incentive or program that reduces the tax that an individual or a company owes. It reduces the tax liability of these entities. Some examples include deduction for pension contributions or tax credits on a high value item or system that your business has installed recently. Sometimes, tax relief is available in support of cleaner energy or because of an environmental catastrophe, such as homes or businesses located in an area that has recently been hit by a hurricane.
Why do you need tax relief?
Well, for starters, if you are entitled to any money off your taxes, you should take it! The chance for free money doesn’t arise that often, does it? Many people simply don’t know what they are entitled to. Other people are getting into debt from their taxes. The first thing that you should do when you discover that you may be getting into debt with taxes is to act fast. Don’t hide that red letter behind the clock, or shove it into a drawer. This is a problem that can escalate quickly and can even lead to the IRS putting a legal hold on your property, also known as a lien.
You can, of course try and figure it out on your own, particularly if you are financially minded. However, if it’s something that terrifies you, or you feel there may be tax reliefs available for your business, it is always worth consulting an expert. These experts show up in the form of tax relief companies.
What is a tax relief company?
A business that is in existence purely to assist people with the IRS. These companies include trained tax professionals and lawyers on their staff. Some may be former IRS employees. They are experts on tax code and deal with it daily. A quick glance at the government page of deductions and tax rules will show you how invaluable it can be to have someone who knows what they are doing. They can assist with reducing or waiving penalties, reduce your overall debt and organise payments to be made in instalments. You will pay for the privilege of course, but it can save you thousands of dollars over the years, and keep you out ofcourts and in your own home.
When you consider that recent figures state that more than 16 million people and businesses have accumulated over $370 billion in unpaid taxes, it makes sense that there are many people out there who would benefit from using a tax relief company.
What to look out for when choosing a tax relief company
Many tax relief companies do great work, and really help people when they need it most. However, there are also some companies that scam people out of their money, and not delivering what they have promised. It’s easy to prey on people when they are vulnerable and desperate for a way out of a sticky situation. So be very careful when you are choosing a tax relief company. Don’t just pick the first one from an ad off the TV – do some research first. Here are some warning signs you need to look out for that may hint at the company’s credibility:
- Making grand statements about getting you huge sums and money back without having seen a single statement or document from you or your company.
- Making guarantees. Only the IRS can make the final decision on your finances. A tax relief company can help you navigate, and can present their recent successes but they can’t guarantee you relief.
- Using any kind of delay tactics: time is of the essence when dealing with the IRS, and delays can be costly.
- Not assessing your financial statements – these should be combed over in great detail before they can tell you anything at all.
- Not entailing what their fee covers. They should be clear about this before you engage their services
The answer is yes. The reputable ones do work, certainly in getting penalties waived and reducing the amount of debt that you or your company may owe. Look for companies who are well established and have been in business for years. Ask for references, as you would with a tradesperson.
Here are some questions you should ask in order to choose the right tax relief company:
- What kind of tax relief services does your company offer? Some answers you will be looking for here include: instalment agreements, IRS audit defense, collection appeal, bank levy release, penalty abatement and tax lien withdrawal.
- What accreditation does your company hold? Look for companies that are members of the National Association of Tax Professionals (for obvious reasons) and the National Association of Enrolled Agents.
- Do you have licensed tax attorneys on your staff? This is vital, and don’t just take their word for it. Check that their links to legal firms aren’t just a marketing ploy and get the names of the attorneys who work each case.
- What kind of support staff do you have in the company? Each proper tax relief company should have enrolled agents on their staff to assist the attorneys. Get their names and check their credentials.
These questions should help you determine how suitable a tax relief firm are to work on your case. It’s no point throwing good money after bad. Although they can’t definitively promise you anything, getting people who are truly experienced and qualified for the role will go a long way in assisting your cause for tax relief.