How to Hire a Tax Resolution Company You Can Trust – 7 Ways to Ensure That Your IRS Tax Problems Are in Good Hands

Tax-burdened Americans seeking professional help in solving their IRS problems have more options today than ever before. The tax debt relief industry has seen dramatic growth over the past 5 years as many companies have entered the arena to offer help to taxpayers impacted by a sharp increase in IRS tax compliance enforcement.

But lately, many of these so-called tax resolution firms have been making headlines for misleading consumers with deceptive advertising and false claims that they can settle taxpayers’ debt for “pennies on the dollar.” Consequently, many firms have been exposed for taking advantage of people seeking tax assistance. For a fee, they promise to help taxpayers, but instead leave them with their original tax debt, plus additional interest and penalties.

Now consumers are being urged to use caution when dealing with firms that claim they can help taxpayers reduce their back taxes. But how do consumers choose from the large number of companies out there that offer tax relief assistance? And more importantly, how do they know they won’t end up getting ripped off?

When selecting a firm, remember that these are the people who will represent you before the IRS. Therefore it is important that you hire a professional who is well versed in tax law and IRS procedures. IRS representation is a complicated field with many different laws to interpret. While any Attorney, CPA or Enrolled Agent can represent clients before the IRS, few are truly qualified to provide the knowledge, experience and negotiating skills needed to successfully represent a taxpayer before the IRS.

When hiring a tax resolution company, keep in mind the following:

1. As a rule, the firm’s track record is the best objective indicator of how that firm will manage your case. What is the firm’s tax relief success rate? How many Offers in Compromise has the firm successfully settled? What is the total dollars negotiated in settlements divided by total dollars in tax, interest and penalties owed? Additionally, the credentials should be substantiated by an independent third party, like the Better Business Bureau. You can also ask the firm if they have been designated a Certified Tax Resolution Specialist.

2. Be leery of demands that the company be paid in full upfront. Trust is a two-way street. If you can trust that the company will provide the services as promised in their agreement, they in turn must trust that you will pay them and begin working 100% for you upon receiving a “good faith” retainer.

3. A taxpayer with a troubling problem should turn and run the other way if a company “guarantees” specific results. They are telling you what you want to hear, whether or not it’s really possible. Know that there are no sure fire ways to reduce your liability and that contrary to some companies’ claims, not everyone qualifies for the IRS Offer In Compromise program. Companies must obtain your background information and proper documentation before evaluating your situation and determining your options. An honest company will ask you lots of questions upfront in your initial consultation in order to understand the precise needs and specifics of your case.

4. Don’t be afraid to ask for the names of the owners of the company. Any hesitation by their representatives is a definite cautionary red flag that they don’t want you to know who is behind the company and ultimately responsible for your case.

5. Be sure to ask, “How long has your company been in business?” Most new companies (no matter what the business is) never make it due to a wide variety of reasons. In today’s difficult financial climate you don’t want to get stuck with a company that hasn’t been in business for at least five years. Otherwise, they might not even be in business six months from now.

6. Be especially cautious when dealing with high-pressure sales people. They are usually working in a “boiler room” where they’ve been trained to prey upon a taxpayer’s fears.

7. Always ask about the people who will be doing the work on your behalf. When will you be contacted once you retain their services? Will your phone calls and emails be returned promptly? Will your case be assigned to someone in particular so that there is real accountability? That’s another reason to never give a firm 100% of your hard-earned money upfront. Once they have your full payment, you have no recourse.

For information on how to choose a reputable tax preparer, visit the IRS web site.

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2 Responses to “How to Hire a Tax Resolution Company You Can Trust – 7 Ways to Ensure That Your IRS Tax Problems Are in Good Hands”

  1. » In Ailing Economy, More Taxpayers Are Likely to Qualify for Offer in Compromise » Tax Relief Tips from the Experts at Tax Resolution University » Blog Archive Says:

    [...] Companies need to be upfront and let clients know that not everyone can qualify for this type of help because the IRS has very strict guidelines governing eligibility. And taxpayers need to do their research and know what to look for when hiring an ethical and professional tax resolution company. [...]

  2. Tax Resolution Services CEO Named Executive of the Year Finalist in 2009 American Business Awards | Tax Attorney and Tax Resolution Services: IRS Help Blog Says:

    [...] solutions. Over the last 5 years, a sharp increase in IRS tax compliance enforcement has spurred a dramatic growth in the tax help arena, and many players in the tax debt relief industry have been making headlines for misleading [...]

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