It’s not uncommon to receive a letter from the IRS informing you that you’ve completed a tax return incorrectly and now owe more money or fees. Nor is it uncommon to forget or fail to file for a few years in a row, resulting in a major pileup of money owed to the IRS. There are a raft of other reasons you might need tax resolution as well, but the bottom line is this: If you have to treat with the IRS, you want help doing it. And if so, you’re probably wondering, “Are tax resolution services legit?”
Unfortunately, there exists an entire industry ready and waiting to take advantage of your need. Many so-called tax resolution services never resolve your tax problem, instead of costing you money and leaving you in the same situation with the Internal Revenue Service as you were before. Or possibly worse, since you waited to deal with it.
The obvious conclusion is that you should find the best possible representation. But how, and are there any tax resolution services you can trust?
Can You Trust a Tax Resolution Company to Represent You?
Blanket Advice: You Should Mistrust Tax Resolution Services
A tax resolution service works on a fairly basic model: You pay them a fee, and they will represent you to the IRS and get your tax burden reduced, eliminated or put on a manageable payment plan. That, however, is frequently not how it works. Instead, these companies:
- Take your money, but don’t move forward
- Shuffle you from caseworker to caseworker
- Use advertising dollars to garner false or misleading reviews
- Harass you about your need for their services until you give in
- Use scare tactics
- Cancel your contract abruptly if you don’t provide documents – without a refund
- Focus on lead generation rather than helping current clients
If this sounds like a pretty crummy business model, that’s because it is. It is not based on helping the consumer, but rather on getting as much money from you as possible before moving on to the next sucker. Never fear, though: There is a solution.
Tax Resolution Is Still a Need, So Here’s What to Do Instead
When you need tax resolution services, see a Certified Public Accountant, lawyer or Enrolled Agent. While anyone can represent you to the IRS, people in these roles are trained to represent you. They know which documents are needed, can identify any holes you might have in your case and shore them up, and can predict the outcome most accurately.
While CPAs and Enrolled Agents also ask for fees upfront, they are far less likely to misuse them, because smaller practices have more riding on their honorable behavior. Plus, they charge you as you go along, usually based on hourly work, which spreads out the cost for you over time. Lastly, this class of service people is much likelier to have the training needed to get you a good outcome.
If you’re not sure where to turn, the best bet is to Google “CPA” or “Enrolled Agent” in your area rather than “tax resolution services.” Chances are you’ll find someone who can do the job, or who can refer you to a good option.
Be a Conscientious Consumer
IRS scammers call 2 Hendersonville detectives within minutes
He says they kept him on the phone, pretending to be IRS agents, even giving him reference numbers for authenticity. He says the scam artist offered him a payment plan. Police remind everyone… https://t.co/0repROfXzF
— Peters CPA, LLC (@PetersCPALLC) November 19, 2017
That’s not to say that a regular CPA or tax accountant will necessarily treat you fairly. Theoretically, they can do anything a tax resolution service could do, including giving you bad advice, representing you poorly, canceling a contract short notice, or taking your money and refusing to give it back – which will probably cost you more in legal fees than its worth to recoup the loss.
Therefore, you should make a careful decision based on research. Talk to several tax accountants and ask what the timeline is like, what their success rate is, and what factors are involved in your case. While you can’t expect for a full explanation of your options before you’ve hired them on, you’ll get enough of an idea in this conversation to make an informed decision.
The takeaway? You’re much better off working with a dedicated tax accountant or CPA who has an EA and can represent you to the IRS. You’ll have the opportunity to get to know your representative in the time leading up to the appointment with the IRS, as well as the security of knowing your case won’t be passed off to someone else. This route is safer, offers more peace of mind and has a higher chance of working in the end, so it’s probably the one for you.
Do you have some tips for finding the right accountant who can help prepare your tax or represent you to the IRS? Share your ideas in the comments section down below.