How is a Tax Attorney Different than a Tax Relief Company?

Who wants to get weighed down by IRS collections, such as tax levies, excessive monthly payments, and wage garnishments?

Tax relief companies could be the solution – or so according to those TV, radio, and internet ads. 

With irresistible claims that would solve your IRS woes and free consultations, it’s tempting to give these companies a chance. 

But before you give them a call, dig deeper into what these companies actually do. 

Tax Relief Companies Often Make Promises That Are Too Good to be True

Tax relief companies serve as intermediaries between the IRS and the taxpayer who needs assistance. These companies often advertise attractive solutions for taxpayers with IRS issues which could include: 

• Zero penalties 
• Zero interest
• Reduced tax debt

Many taxpayers learn about the services provided by these companies thanks to their national advertising campaigns and telemarketers. 

Most also offer the option to settle the debt for less than the full amount with an Offer in Compromise – a legitimate option when paying full liability would result in financial hardship. 

In reality, not all taxpayers are eligible for this program. There are rules that have to be met to even qualify. But tax relief companies rarely disclose this to emotional clients wanting an immediate solution to their tax debt. 

Any reference to “immediate” when it comes to the IRS or back taxes is telling. There is nothing immediate or even remotely fast when it comes to these topics.

Tax Attorneys Provide Advice Based on The Circumstances Surrounding Your Case

Like tax relief companies, a tax attorney can negotiate with the IRS on your behalf. But unlike these companies, tax attorneys are not quick to provide promises to a taxpayer. 

Taxpayer issues vary in complexity and circumstances may differ. Only after studying each case can a tax attorney provide advice and offer practical options. 

Almost always, prospects are often not as attractive as what tax relief companies promise, but it’s the most realistic legal option for the taxpayer. 

Controversies Abound Among Tax Relief Companies

While tax relief companies may be legitimate, taxpayers should beware of their advertised promises. And there have been many cases filed against tax relief companies across the country. 

Not all tax relief companies are scams, but many are. 

Several tax relief companies were hit by consumer class action lawsuits. Some had to file for bankruptcy, others had to pay hefty penalties. Many companies are also under investigation by regulators for unscrupulous operations and false advertising. 

If you’ve ever heard or read about the now-defunct Houston-based company TaxMasters Inc., you probably have a firm idea of how controversial tax relief companies are. 

The company went public in 2010 but after two years, the company faced a $195 million judgment in Texas. The lawsuit involved almost 1,000 consumer complaints about the company’s policy to collect upfront fees ranging from $1,500 to $9,000 and failure to disclose the fine print during its sales calls. 

And TaxMasters is not the only one to have the same fate – there’s J.K. Harris tax resolution company, and American Tax Relief, Global Tax Solutions, among others. 

Tax Relief Companies Employ Professionals But There’s a Catch

Given the nature of the services they provide, some tax relief companies even employ tax attorneys, tax experts, enrolled agents, and certified public accountants. 

But the person handling your case may not be any of these professionals. 

In the end, the person handling your problem may not be an expert at all – this could mean a greater tax burden on your part and an even larger tax debt on your part. 

On the other hand, with a tax attorney, you know who is handling your case. 

And this more personal approach to settling the tax debt could help you learn more about the tax law, what you can do now, and what you can do in the future to avoid IRS issues. You will also know all your options – not just an offer in compromise – which may not be applicable to your case. 

Don’t Be an Easy Target – Find a Trustworthy and Capable Tax Attorney

When you are at a limbo on how to deal with your IRS debt, the Federal Trade Commission has some useful advice – consider your options. 

Working with the IRS directly is possible. But given how complex tax laws can be, it may be better to consult a tax attorney especially when there’s serious consequences involved. 

Hiring licensed local tax professionals is also advisable, but don’t forget to check client reviews. 

It’s never too late to get on the right track to solving your tax issues, contact us today to understand what you can do about it.

Please call us at (713) 909-4906 or schedule an appointment to discuss your tax debt.