Tax Relief FAQs: Asking the Right Questions for Maximum Benefits
Taxes and tax relief is sometimes mired in confusion and so understanding the fundamentals of both is a key component in establishing a viable tax strategy. The people that need this the most are of course the ones who find themselves owing the IRS and so if you are one of those people, the following FAQs may be just what you need to get things sorted out.
Let’s Start With The Absolute Basics: What Is Tax Relief?
Tax relief refers to any attempt to alleviate a tax burden or a tax issue with the IRS. It can take many forms, but frequently it involves either a deferral of payment or some managed repayment system. Tax relief is available at both the state and federal level and access to both will depend on your individual circumstances. The rules are very precise and qualification is sometimes not easy. The more money you have at your disposal, the less lenient the IRS will be at extending tax relief.
If you’ve been served with a notice by the IRS then tax relief is perhaps the best option for getting out of a jam with them. The next question in the list of FAQs is therefore very pertinent indeed.
What Is A Tax Relief Specialist And Do I Need One?
Tax relief specialists are trained professionals who are licensed to dispense tax advice and/or help in resolving issues with the tax authorities. You’ll almost certainly need the help and advice of a tax specialist if the IRS is in advance stages of action against you. Here’s a brief list of circumstances that may warrant the help of a tax specialist:
- IRS serves a notice of collection
- IRS issues a notice of intent to initiate a lien against your property or other assets
- IRS issues a notice of intent to garnish wages
- IRS issues notice of fines and impending court action against you
Tax relief specialist by nature of their trade are very knowledgeable of the tax laws, loopholes and remedies available to people having problems with the IRS. In addition to this, they are also very good at negotiating—a necessary skill involved with any dealings with the rugged agents deployed frequently by the IRS.
Do Tax Relief Specialists Offer Any Type Of Guarantee?
As paid professionals, tax relief specialists have a fiduciary responsibility to their clients. As such, the level of service they dispense must be reasonable and fit for the purpose of their hire. Like most professionals however, they cannot offer a 100% iron-clad guarantee that things will work out in your favor. In many instances, a case may be so bad that the most a specialist may be able to do is lessen the blow.
This doesn’t mean however that you shouldn’t press your tax specialist for maximum outcome, and you must always ensure that you get value for money in any engagement with one.
Does A Tax Relief Professional Cost A Fortune?
The amount you pay for representation may vary in line with your circumstances. The greater the issues you face with the IRS, the more likely you are to pay more than average for professional services. Typically though, the fees will be consistent with those generally charged by tax firms who assist people from year to year in making their tax filings. Bear in mind also that tax specialists operate in a wide array of fields. Some tax specialists for instance are certified public accountants (CPA); others are tax attorneys. Each will have their own pricing standards and methods of getting the job done so expect slight variations in pricing.
Which Is My Best Option: Enrolled Agent, CPA Or Tax Attorney?
The answer to this is question is not so straightforward but the extent of your tax troubles is a good measure of which professional is suited for your circumstances. Tax relief is heavily tied into tax mitigation, i.e. making the burden as light as possible. In this regard, enrolled agents are more qualified to help you get the maximum benefits out of an engagement with the IRS. In addition to having the experience, enrolled agents are constantly put through their paces by the IRS and have to maintain very high standards of service in order to keep their licenses.
Having said all that, you may find tax attorneys or CPAs who have knowledge and track records comparable to enrolled agents. If you do proper due diligence and find a capable CPA or tax attorney, don’t hesitate to engage one for help.
Tax attorneys are more suited for the bare knuckle world of court and so if you find yourself fighting the IRS for your freedom, having a tax attorney advocating on your behalf is a sound choice. CPAs are more in tune with business reporting rules and regulations and as such are best retained when you own and operate a business that is facing trouble with the IRS.
Your choice will also hinge heavily on your budget. CPAs and tax attorneys are heavy hitters when it comes to pricing and so it is always advised to seek out an enrolled agent first. By doing this you get the benefit of having your situation properly appraised (usually free initially); this will give you the detail and ammunition you need in order to mount a challenge.
Remember that no other professional understand IRS collection rules and procedures like enrolled agents. Advocacy and reporting are best suited for tax attorneys and CPA’s respectively.
Is Qualification For Tax Relief Difficult?
It’s important to understand the premise behind tax relief and why it was implemented in the first place. The old way was to grab those who owed money to the government by the collar and cart them off to jail—this practice was seen as a deterrent measure mostly. The trouble with that strategy was that you ended up putting people away who wouldn’t:
- Be very useful to society and
- Wouldn’t end up paying anything substantial to the government
Tax relief was therefore a way to recover ‘something meaningful’ from any sums owed by delinquent tax payers. The IRS doesn’t offer qualification to just anyone however, and a rigorous set of requirements have to be met. People who have the means (money in the bank or elsewhere) face a tougher time getting tax relief but it isn’t impossible. It’s all down to how your case is presented and who you have fighting in your corner.
Factors that will determine the level of relief you get (if any) may include, but not limited to:
- Your tax bracket
- The amount of cash or assets at your disposal
- Whether you are considered for tax purposes a business or an individual
- The level of delinquency
- The amount owed
The best approach is to consult with a tax relief specialist early toe establish your options and what may be available to you.
How Efficient Is The Tax Relief Application Process?
Tax relief involves lots of form filing and the accurate application of rules and statutes that will provide for maximum benefits at the end of a ruling. As such, the application process should be approached with care and diligence. Usually between making an application to the IRS and getting a response takes around 30 days or so. Some tax relief options require no detailed submission of records, but some (particularly for businesses) require extensive documentation.
Again, having a tax specialist on board during the entire process will lessen the burden and complexity of navigating the rules, filling forms and making the actual submission.
Is There A Way To Verify The Credentials Of Tax Specialists?
The area of taxation fortunately, is heavily regulated and the various professionals who offer tax advice and assistance have to maintain strict ethics and high service standards. This however doesn’t avail you of the responsibility to check their backgrounds and the best place to start is the Better Business Bureau (BBB). The BBB provides a comprehensive database of most professionals and companies and will offer up any details that will either make your refrain or go ahead with an engagement. Many consumers who get excessively bad service lodge complaints with the BBB and these are available right from their website.
You can also leverage the records of the professional association that any particular specialist is a part of. Attorneys of course will be regulated by the State Bar Association, whilst CPA’s will be regulated by their own standard setting body. Enrolled agents are licensed by the IRS and so getting to grips with how good or bad a particular agent is shouldn’t be too difficult.
What’s The Best Way To Choose A Provider?
If you’ve looked thoroughly at the answers given to the previous questions and have a sound understanding of them, then you ultimate move is of course to choose a provider.
Finding one is easy with the internet and many firms that offer tax relief advice and assistance can be accessed with just a few mouse clicks. Things to look for when you visit a site include:
- A professional layout and ‘presence’
- Very clearly visible contact details (email, phone number and a physical address
- Transparency of rates (anything that suggests murky pricing standards should be avoided)
- No upfront request for payments (most initial consultations are free as per the industry standard)
From there you should do some offsite background check. The BBB is a good place to start and you can also type in [company name scam] in your favorite search engine. That will take care of locating a specialist, from there you need to dig a little deeper.
Once you narrow things down to a few tax specialists, you next need to establish how they charge for their services. Are they flat fee or per-hour billing? Will you be assigned a specific professional to handle your case throughout and do you have flexibility in asking for someone else to assist you if the person assigned isn’t your cup of tea? Answering these questions in the affirmative is a good start in making the ultimate choice.
Once you do choose a professional, the process should unfold rather seamlessly provided the adequate groundwork has been laid beforehand.