Tax Relief

Finest Tax Reduction Firms of 2021

Tax debt can be a huge and stressful burden, especially when you’re already struggling. Fortunately, there is professional help available for those who are thousands of dollars in debt to the IRS.

Tax relief companies employ a number of tax professionals that can help you negotiate payment options with the IRS and state tax agencies: from payment plans to pausing collections during times of financial hardship (called “currently not collectible” status).

Read on to find out more about the best tax relief companies, as determined by their availability, cost and consumer reviews.

Our Top Picks for Tax Relief Companies

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  • Money-back guarantee with no time limit
  • Some customers have reported cases resolved in as little as a week
  • Dedicated tax relief services for truck drivers
  • Customers have reported poor communication on cases that go on longer than a week

HIGHLIGHTS

Minimum Debt Required$7,500Certifications and membershipsNATP, NAEA, California Tax Education Council (CTEC)BBB RatingA+

Why we chose this company: Anthem Tax Services’ full money-back guarantee — which promises all your money back if your tax debt isn’t reduced or eliminated — is among the best in the industry.

Anthem Tax Services offers both IRS tax debt relief and corporate tax preparation services. The company helps you apply for all IRS tax debt relief programs, including offers in compromise (OIC), innocent spouse relief, and “currently not collectible” status.

Notably, they also offer assistance with filing for wage garnishment and tax levy release — services not commonly offered by competitors.

Anthem’s money-back guarantee is also one of the best in the tax debt relief industry, offering all of your money back if it fails to secure any sort of resolution from the IRS. It’s important to note that said guarantee doesn’t include the initial investigation fee, which usually starts at $275, depending on the details of your case.

Anthem takes on customers that have as little as $7,500 in tax debt (lower than the standard $10,000) and offers free consultations. As a general rule, the company charges a flat rate fee upfront — which can vary greatly per individual customer but generally starts around $3,000 — though the price may change if additional services are required along the way.

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  • Proprietary app provides free assessment of collection notices
  • Free consultations
  • Minimum $10,000 tax debt required
  • 15-day money-back guarantee shorter than competitors

HIGHLIGHTS

Minimum Debt Required$10,000Certifications and membershipsNAEA, IRS-approved Continuing Education Provider, NATPBBB ratingA+

Why we chose this company: Optima’s proprietary app, which provides free guidance on tax collection notices, makes it the company with the best mobile app in the industry.

Optima Tax Relief works with every type of IRS and state tax debt relief options, including offers in compromise, penalty abatements, innocent spouse relief and wage garnishment releases.

The company’s staff is composed of several types of tax professionals, including enrolled agents, tax attorneys and CPAs. The company also offers individual and business tax preparation services.

Like many of the top tax debt relief companies, Optima offers free consultations. During these, the company outlines their two-step approach: setting up a protection plan — which involves filing paperwork to pause any immediate IRS action against you — and providing you with a case summary.

Optima’s initiation fee is generally around $495, and you need to have a minimum of $10,000 in tax debt. Notably, Optima has a proprietary app that lets you access free assessments of any IRS collection notice you receive and also helps you file for an extension on your tax filing deadline.

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  • 15-day money-back guarantee for new customers
  • Can help resolve complex business tax situations
  • 15-day money-back guarantee may be too short for serious tax debt issues

HIGHLIGHTS

Minimum Debt Required$10,000Certifications and membershipsNAEABBB ratingA+

Why we chose this company: Larson Tax Relief’s wide range of business tax services make them an excellent choice for business and corporate tax debt relief.

Larson Tax Relief works with all sorts of tax debt relief services, from personal IRS tax debt relief to corporate tax assistance and even assistance with delaying or preventing bank levies. Larson offers free consultations, but does require you to have a minimum of $10,000 in tax debt to take on your case.

In addition to the large number of positive reviews the company receives in customer review sites, Larson stands out for its business tax services. The company can handle just about everything about business tax preparation, including paperwork for payroll taxes and corporate income taxes. This can be especially useful for small business owners or those with smaller accounting departments that need the support.

Larson has a 15-day money-back guarantee that applies to all new customers — this is definitely on the shorter side since other companies offer 30 days. It might not be all that useful if your case takes weeks to resolve.

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Tax Defense Network – Best for Smaller Debt

  • Low minimum debt requirement
  • Wide range of tax debt relief and preparation services
  • Bilingual customer service
  • Money-back guarantee much shorter than competitors (3 days)

HIGHLIGHTS

Minimum Debt Required$5,000Certifications and membershipsNational Association of Enrolled Agents (NAEA), ASTPS, NATP, Association of International Certified Public Accountants (AICPA)BBB ratingA+

Why we chose this company: While most tax relief services only take on clients who are more than $10,000 in debt, Tax Defense Network’s services are available to those whose tax debt is as low as $5,000.

Tax Defense Network stands out for quite a few reasons. It features fully bilingual customer service, with its website (and representatives) accessible to both Spanish and English speakers. The company also accepts tax debt as low as $5,000 in some cases, making it more accessible than many competitors.

Aside from the full range of IRS and state tax debt relief options that competitors also work with (payments plans, offers in compromise, innocent spouse relief, etc.) Tax Defense network also offers specialized business tax solutions such as close corporate filing services for when businesses need to shut down permanently. Its educational resources are also more robust than other companies’, including offer-in-compromise and tax withholding calculators.

Despite the company’s free consultations, its 3-day money-back guarantee is much shorter than competitors — most companies on this list, for instance, offer 15 or 30 days. Regardless, its extensive certifications and memberships in national tax professional organizations help to support the numerous positive reviews from its current and former customers.

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  • Affordable initial fees
  • Bilingual service
  • Limited pricing information (other than initiation fees)
  • Limited state tax debt relief options

HIGHLIGHTS

Minimum Debt Required$5,000Certifications/MembershipsIRS Continuing Education ProviderBBB RatingA+

Community Tax is one of the two companies on our list to offer bilingual assistance both online and through their representatives. In addition to tax debt relief services, Community Tax also offers tax filing, bookkeeping and business accounting services. Consultations are free and their A+ BBB rating is supported by numerous positive reviews and quick response time to customer complaints.

They accept customers with tax debt as low as $5,000 and their money-back guarantee varies from state to state, ranging between 3 and 10 days, and offering a full refund if your issues aren’t resolved. Their initial investigation fees are some of the more affordable ranging between $250-$500.

The company focuses on offering IRS tax debt relief, although it also offers limited state tax assistance. Like other companies, Community Tax handles applications for everything from installment agreements to offers in compromise, but not innocent spouse relief.

Other tax relief companies we considered

Precision Tax Relief

  • 30-day money-back guarantee
  • No-interest payment plans for all clients
  • Free consultations

Precision Tax Relief primarily focuses on IRS tax debt relief, but can also handle state tax issues. It doesn’t offer audit representation for its clients.

Aside from tax debt relief, Precision also offers assistance with securing wage garnishment and levy releases, which can provide a significant amount of financial relief, if granted by the IRS. Individual and business tax preparation services are also available to clients, to avoid tax debt issues in the first place.

Precision makes it clear that their payment plans are always interest-free (other companies aren’t as forthcoming with the details of the payment plans they offer.) Its 30-day money-back guarantee is also fairly generous, since many — but not all — tax debt issues can be resolved within the span of three to four weeks.

Fees and rates are not advertised upfront, but they are always provided during the free consultations.

Victory Tax Lawyers

  • No money-back guarantee
  • Minimum $20,000 tax debt required

Victory Tax Lawyers are first and foremost tax attorneys, as the name says. They focus on tax controversy issues, such as preventing or resolving tax-related criminal charges, rather than general debt relief.

However, Victory Tax does handle common IRS tax debt relief options such as compromise and installment agreements, but not innocent spouse relief.

Victory Tax offers assistance to both individuals and businesses, including services such as tax preparation, tax levy and lien defense and audit representation. Notably, they also assist with Report of Foreign Bank and Financial Accounts (FBAR) filings, which must be filed if you have bank accounts in countries other than the U.S..

Furthermore, they only work with cases involving a minimum of $20,000 in tax debt, which is considerably higher than other companies on this list.

  • Minimum Debt Required: $20,000
  • Certifications/memberships: Association of American Tax Problem Solvers (ASTPS)
  • BBB Rating: A+

Tax Relief Companies Guide

If your tax situation is too complicated to manage on your own, tax relief professionals could help bring you some peace of mind. However, there are important things to keep in mind that can help you choose the right company for you.

What is tax debt relief?

Tax debt relief refers to a number of measures and strategies that help individuals pay or reduce their tax liability.

Although the term originally referred to policies aimed at reducing individuals and businesses’ tax burden, it is now often used to refer to options offered by federal and state governments to help those who are struggling to pay their tax debt. These might include payment plans, settlements (called offers-in-compromise) and wage garnishments.

While both state and federal tax collectors offer similar plans, local regulations can vary widely. It’s important to check your state’s comptroller office for the specific options available to you.

It’s important to note that anyone can negotiate these options directly with the IRS. However, there are situations when hiring professionals is a worthwhile investment.

Tax relief companies — also known as tax resolution firms — use their knowledge of federal and state law to review your documents and financial situation, and identify the best alternative. The process typically involves filing paperwork and communicating with the IRS on your behalf. Some companies employ tax attorneys who can, in some particularly complex cases, also act as intermediaries in your negotiations with the government.

How do tax relief companies work?

Tax relief companies work with the IRS on taxpayers’ behalf to reduce the amount of back taxes owed. However, it’s worth noting that you can do pretty much everything that tax relief companies do by speaking directly with the IRS.

The key difference is that good tax relief companies employ experienced professionals, well-versed in tax law, who can more easily navigate complicated cases involving higher debt amounts.

For instance, if your tax debt issues are a matter of not having paid last year’s tax bill, you might be better off simply reaching out to the IRS yourself, as there’s little these companies can do that you can’t.

However, if your tax debt case involves multiple bank accounts, assets, years of unpaid taxes and other particulars that complicate your tax situation, a tax relief company can help by sorting through your paperwork and identifying the best options available for you. In very rare cases, they could even identify things that the IRS missed and negotiate a lower tax bill.

As a general rule, if your tax debt is under $10,000, you might be better off attempting to negotiate with the IRS yourself. First, most tax relief companies have a minimum debt requirement — usually $10,000 or more. Second, if your debt is under that amount, you might do better paying the IRS in installments instead of increasing your debt load by paying for tax relief services.

Of course, no two people share the same circumstances and if you feel like you need tax help — regardless of the size of your debt — many tax relief firms offer a free consultation to get you started.

Common tax problems

Here are some of the more common tax problems handled by tax relief companies:

Back taxes
Put simply, these are taxes owed due to mistakes in filing or not filing taxes at all. These can accrue interest, which can cause your tax debt to balloon to unmanageable levels. The IRS publishes the interest rates for penalties quarterly, so it’s important to check the agency’s website for the most up-to-date information.

Wage garnishments
When your tax bill is due, the IRS will send you a series of collection notices. If you ignore these for long enough, the IRS may decide to collect the debt directly from your wages by garnishing part of them.

Your employer receives Publication 1494 to help determine the portion of your wages that is exempt from garnishment, based on your marital status and number of dependents, if any. Garnishment usually continues until the debt is satisfied, but tax relief companies may be able to assist by securing alternative payment arrangements.

Tax liens
If you fail to reach a payment agreement with the IRS, the government agency may place a tax lien on your assets or property. A lien gives the government a legal claim to what you own and, if you were to fail to pay your debt, gives them the right to seize your assets. The IRS will lift the lien once the debt is fully paid.

Tax levies
If the government places a lien on your property and the debt still goes unpaid, they might proceed to a tax levy — that is, they will proceed to enforce its legal right to seize your property in order to pay your debt.

Tax audits
If the IRS spots irregularities in your taxes, the agency may choose to audit you. While anyone can be audited, wealthier individuals — especially those who earn $10 million or more — are the most likely to be audited.

How much does tax relief cost?

Given the complicated nature of tax relief services, it’s safe to say that costs vary greatly from case to case. There are two common pricing models: a percentage of the debt owed or flat hourly rates. The most cost-effective choice will depend on the size of your tax debt and how complicated your case is.

Most companies that operate on a percentage basis have rates that range from 10% to 15% of your tax debt. If, for example, your debt is $10,000 (many companies’ required minimum debt) you can expect to pay a minimum of $1,000 to $1,500.

On the other hand, a company that charges a flat hourly rate might be more affordable if the amount you owe is high, but your case is relatively straightforward. The average hourly rate for tax relief companies can range from $240 to $1000, which might make them a preferable option.

Some companies have individual prices for different services. For instance, they may charge $300 for a basic investigation, but upwards of $1,000 if you want to pursue a specific tax relief option such as an offer in compromise (OIC), which allows you to settle your tax debt for a lower amount than originally specified.

For these reasons, it cannot be overstated how important it is to ask for as much information as a company is willing/able to disclose before contracting their services. Ideally, you’ll want to get quotes in writing, including the possibility of any additional fees and all available payment options.

Tax debt relief options

The following tax debt relief options are available to anyone directly from the IRS. Some state agencies may offer similar programs for local taxes. Before reaching out to tax relief companies, it’s always a good idea to check the IRS website or speak with a representative over the phone to obtain further information about these options.

Remember that most of the work that tax relief companies do involves reviewing your case details and identifying the best option for your situation based on the information they find; they don’t have access to any information that you could not obtain yourself, and they cannot guarantee any specific result.

If your tax situation is relatively straightforward — meaning you don’t have multiple sources of income, a complex stock portfolio, etc. — you’re usually better off speaking to the IRS directly.

Offers in compromise

Offers in compromise are a way to settle your tax debt for less than the full amount you owe. Under this arrangement, the IRS considers factors such as your ability to pay, income, expenses and assets to determine if you are eligible. Per the IRS, offers in compromise are only considered if it has reason to believe that the lower amount is the most that can be collected “within a reasonable amount of time,” which makes this one of the least commonly offered tax debt relief options.

Innocent spouse relief

This type of tax debt relief applies when your current or former spouse commits an error of omission when filing taxes. Innocent spouse relief exempts you from any tax penalties that might apply as a result of these filing errors. This option only applies if the IRS determines that you had no reasonable way of knowing about the omissions.

Installment agreement

If you don’t have the money to pay your tax debt in a single payment, the IRS may offer an installment agreement where you pay your debt over time. There are two types of installment agreements: short-term (180 days or less) and long-term (monthly payments for as long as you need to pay your debt.)

While there isn’t a specific amount you must owe to apply for an installment agreement, online applications are accepted for amounts up to $50,000 (long-term) or $100,000 (short-term), making it one of the more common and accessible options for individuals who want to directly negotiate with the IRS.

Penalty abatement

Sometimes known as “first-time penalty abatement,” this tax relief option is commonly available for lesser tax penalties such as failing to make a payment on a single tax return or missing a filing deadline. The main requirement to be eligible for this type of relief is having no penalties for the previous three tax years, although you must have also filed or at least requested an extension on your current taxes.

Currently not collectible

Currently not collectible (CNC) status means that both you and the IRS agree that while taxes are owed, you are currently unable to pay them. As a general rule, you can apply for CNC status when paying your taxes represents an undue burden on your necessary living expenses. This generally refers to scenarios such as being unable to pay essential bills like utilities, rent/mortgage, or even not having enough money left over for basic groceries as a result of your tax debt payment.

If the IRS grants you CNC status, your finances are reviewed every year until it determines that you’re able to pay your debt. Additionally, any future tax refunds you receive may be used to pay down your debt while in CNC status.

IRS Fresh Start Program

The IRS Fresh Start Program — currently known as the Fresh Start Initiative — is a set of guidelines that makes tax debt relief more accessible. Instead of offering a specific type of relief, the Fresh Start Initiative lowers existing requirements to qualify for different IRS relief programs.

Income calculations used to determine eligibility for offers-in-compromise, for instance, have been modified in several important ways. The IRS will now only look at:

  • One year of future income for offers paid in five or fewer months, which is down from four years, and
  • Two years of future income for offers paid in six to 24 months, which is down from five years.

However, all offers must be fully paid within 24 months of the date the offer is accepted.

Tax debt relief companies evaluate the details of your case and check Fresh Start guidelines, helping you find the relief options that you qualify for.

Other services offered by tax relief companies

Audit defense

Some tax professionals offer guaranteed assistance in the event that your tax returns are audited. Think of it like you would car insurance. You pay the tax professional an additional amount up front, and they agree to help you resolve any tax audits that might come up in the future, usually up to three years.

Whether or not you decide to use audit defense services is a personal decision, but keep in mind that the IRS only audited 0.45% of individual tax returns in 2019, with people earning upwards of $1 million being more likely to be audited.

Alternatives to using tax debt relief companies

Direct negotiation with the IRS

As we said above, if your tax debt is comparatively small — generally less than $10,000 — you might want to consider negotiating directly with the IRS yourself. If filling out your tax returns is a relatively straightforward process, applying for any of the IRS’s tax debt relief programs could be considerably cheaper than paying for a tax debt relief company’s services.

Tax relief lawyers

On the other hand, if you feel your tax debt situation is more complicated, working directly with tax relief lawyers might be the way to go. Be aware that some tax debt relief companies employ tax debt relief lawyers, but not all. A tax lawyer is far more specialized than a CPA or an enrolled agent, which can be useful when your case might lead to criminal charges.

Warning signs of scams

Tax debt can create a lot of stress, which can make any offer to get rid of it seem enticing. However, as the FTC warns, not all tax relief companies have your best interests at heart.

Since only the IRS can determine whether you qualify for relief programs, you should steer clear of any tax relief company promising to lower your debt or making claims that seem too good to be true.

Assurances that you qualify for one or more programs — without even taking a look at your case — or claims that they can settle your tax debt in a specific time frame should raise red flags right away.

Many fraudulent companies don’t even bother filing the necessary paperwork to apply for relief programs, instead lying to customers and simply pocketing their money without having done any work. According to FTC reports, some companies even made unauthorized charges to customers’ credit cards long after the case had been closed.

Here are some red flags to look out for when evaluating tax relief companies:

  • Company representatives make guarantees or promises without looking at your case details
  • The company fails to ask specifics about your tax debt situation
  • Upfront payment is demanded in exchange for “guaranteed” results
  • The company contacts you first by cold calling or unsolicited mail and/or e-mail
  • The company uses delay tactics such as asking you for the same documents over and over again

Trustworthy tax relief companies will avoid making absolute guarantees and be transparent about their costs and process up front.

They also often offer free consultations. Making sure that the company you choose is accredited with one or more tax professional organizations such as the National Association of Tax Professionals (NATP), the National Association of Enrolled Agents (NAEA) and the Association of International Certified Professional Accountants (AICPA) will significantly reduce the chances of falling for a scam.

Best Tax Relief Companies FAQ

The concept of tax relief includes a number of government policies and initiatives designed to reduce the tax burden on individuals and businesses. Things such as tax deductions and programs such as the Child Tax Credit are among the many tax relief options available.
Tax relief companies, on the other hand, focus on finding alternatives for managing any existing tax debt you may have with the IRS or local tax collection agencies. While results are never guaranteed, these companies can certainly assist with complicated tax debt issues.

How does tax relief work?

Tax relief is meant to decrease the overall amount of taxes owed by individuals and businesses. In the context of tax relief companies, this involves reviewing your tax paperwork and identifying the best IRS repayment program for your situation. Tax relief professionals are especially helpful in complex tax situations, where their knowledge of tax law could help you find alternatives you might have otherwise missed.

How to file innocent spouse tax relief

If you have a justifiable reason to believe your current or former spouse filed taxes incorrectly (by either underreporting or omitting items,) you may file for innocent spouse relief with the IRS. You are only required to fill out Form 8857 and the IRS will calculate the amount, if any, of taxes you are personally exempted from paying.

How much do tax relief companies charge?

As with many services of this nature, the amount varies per case. It depends on how much tax debt is owed, the type of services offered and the work that needs to be done. Some companies charge a percentage of the debt owed, while others charge flat fees that can range from around $200 to more than $500 per hour.

Are tax relief companies reliable?

The short answer is: it depends on the company. There are certainly disreputable companies to look out for; however, there are also plenty of tax relief firms who have helped consumers navigate complex tax situations successfully. When looking for tax relief companies, pay attention to their degree of transparency and honesty about their services and charges. Companies that overpromise and charge before even looking at your case are more likely to be untrustworthy.

How We Chose the Best Tax Relief Companies

If you’re looking for professional assistance with your tax debt issues, consulting a tax relief company is likely at the top of your mind. While it is entirely possible to negotiate common tax debt issues yourself directly with the IRS, consulting a professional can often provide greater peace of mind. We used the following criteria to choose the best tax relief companies:

Availability

When people think of tax debt relief, they mostly think about the IRS, which is a federal agency. However, tax debt can also impact people at the state level. We picked companies that could deal with both federal and state tax issues and that were available nationwide.

Cost

When considering the best tax debt relief companies, we chose those who offered free consultations and flexible payment plans, making their services accessible to all who need them.

Credibility

To ensure that you only work with companies with a solid track record, we evaluated tax debt relief companies’ reputation by looking at consumer feedback from the Better Business Bureau and other review websites such as Trustpilot.

We also only picked companies with at least one certification or membership in major tax professional organizations such as the National Association of Tax Professionals (NATP), the National Association of Enrolled Agents (NAEA), and many others.

Summary of Money’s Best Tax Relief Companies

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