Tax Relief Companies: Do They Really Help?

Are Tax Relief Companies Legit—and Do They Work?

If you have a tax problem, the most visible solution is a tax relief firm. Big nationwide firms do a lot of advertising online as well as on the TV and radio, and for the last three decades, they have dominated this field. However, that doesn’t mean these companies are the best option when you need help.

In nearly every case, you are better off working with a tax attorney who runs a small firm focused on tax relief. Wondering why? Then, check out our deep dive into the legitimacy of tax relief firms. To get personalized help today, contact us at the Timothy S. Hart Law Group, P.C. today.

The Growing Popularity of Tax Relief Companies

Tax relief companies have ramped up in popularity in recent years, thanks to the growing amount of tax debt owed by Americans. For many people, times are tough. Wages aren’t keeping up with inflation, and everyone’s expenses just seem to keep going up every month. When something needs to be pushed to the back burner, taxes are often the first to go. This is especially true for freelancers and small business owners.

As people decide to take control of their finances and get on top of their tax debt, they often become overwhelmed. Working with the IRS on your own can be stressful, and tax relief companies offer a way to get out of tax debt without dealing with the IRS directly.

Before you decide on a tax relief company, it’s crucial to make sure you know what you’re getting for your money and what results you can expect. There are many different types of firms that provide these services, and they offer vastly different levels of quality.

The Different Types of Tax Relief Firms and What They Offer

As you begin your search for a tax relief provider, you’ll come across several different types of companies. Instead of going with the first company that pops up in an internet search, take your time. Research each service provider and consider what they offer compared to their competitors.

Massive Tax Relief Corporations

The first type of company you’ll frequently see is the massive tax relief corporations that have ads in every single search you make. They appear to have an endless advertising budget and often make lofty promises that they can’t keep. When you work with this type of company, know that you’ll likely never actually speak with a tax pro.

These companies have a well-oiled sales funnel that collects your information, puts you in touch with a salesperson, and assigns you to a representative for the duration of your time with them. The tax pros work behind the scenes. Unfortunately, this means you never really know who’s handling your incredibly important financial affairs.

Because these companies spend so much money on advertising and their sales funnel, tax pros tend to be a small part of the budget. What does this mean for you? Low pay and high turnover—those are never good traits for a company you’re entrusting with your legal issues.

These big corporations tend to pay as little as possible or outsource the work entirely. This is type of place that new tax professionals work for a short period of time when they’re new to gain experience before opening their own firm or transitioning to a local service provider.

Mid-Sized Tax Relief Firms

Next, you may come across mid-size companies that are considerably smaller than tax corporations but still large enough to employ sales professionals. While you’ll still communicate primarily through your sales representative, you’ll at least know that your case is being handled by a legitimate tax professional.

When you look into the company’s staff listings, you find out who actually handles their cases, rather than just a list of their top sales professionals and administrative staff. These companies tend to offer better service than the big firms but slightly higher prices than the small firms. They offer a middle ground for fees and service.

Small Tax Relief Firms

Finally, look into small tax relief firms like the Timothy S. Hart Law Group, P.C.. These are started and owned by tax professionals who have substantial experience in this field and know what it takes to run a firm that meets clients’ needs.

With these firms, you get hands-on help, and your initial consultation will likely be with the tax professional who actually handles your case. Companies like this know how important it is to get a solid grasp of the client’s tax situation from the very beginning. Throughout the process, the tax pro handling your case will be the one who provides you updates and answers your questions.

The Importance of Legitimacy and Transparency

There’s a strong connection between legitimacy and transparency. Companies that put their money into hiring skilled tax professionals instead of expensive sales funnels are proud of the people they hire and the work they do, and they make their processes and services transparent to potential clients.

How do you know if a company is being transparent? Start by looking at their team on their website. If you can find bios for the professionals who handle cases, that’s a good sign that they have a stable team of tax pros who have a solid track record of success. If you find a vague page about their team without actually listing anyone—or only listing sales professionals—that’s a red flag. Ideally, you’ll be able to work with a local firm with tax professionals who have specialized experience in your state.

When you reach out to a company, you can also ask about how your case will be handled. That is, who will be your point of contact? Are you free to ask questions or do you need to wait for updates? If your point of contact is a sales rep or customer service agent, that’s not as good as actually talking to a tax professional who knows the tax laws inside and out.

Another way to evaluate tax relief companies is to look for information on the different types of tax relief services they offer. There are tons of ways to get in trouble with the IRS, and every issue requires a different approach. For example, someone who intentionally hid an income source from the IRS for several years will need much different assistance than someone who failed to file their taxes the last two years but owes a minimal amount.

A firm that talks broadly and vaguely about tax services without getting specific about what they do is a red flag. You should work with a company that understands tax issues in-depth and is ready to assign you to a professional with in-depth experience in your specific issue.

Pricing: What Are You Really Paying For?

Taking care of your tax issues will cost money—there’s no way around that. But if you have to pay for peace of mind, you should at least know what you are paying for.

Bloated Costs With Big Firms

Let’s start with large tax relief corporations again. To be blunt, your money is going into their high-end offices, large marketing budgets, and executive bonuses. Yes, some of your money will pay the tax professional who handles your case—but not enough.

Remember, when tax professionals are paid the bare minimum and loaded with cases (as is often the situation at firms like this), each case gets the absolute least time possible. They simply don’t have time to do more.

Middle Group With Mid-Sized Firms

When it comes to mid-sized firms, some of your money will go toward marketing and sales professionals, but it’s far less. Companies in this category know the importance of investing in experienced tax professionals, so a good chunk of your payment is actually reaching the person who’s helping you. These firms strike a good balance between the volume of cases and the expertise they bring to each case.

Experienced and Personalized Help With Small Firms

Small tax pro firms tend to spend much less on marketing, sales, and overhead. The bulk of the money they take in goes to their tax professionals, with some going to the continued growth of the company. Their case volume is lower because of the hands-on, tailored service they offer to each client. That type of service comes at a price.

It’s important to know that the least expensive option isn’t always the best option. The outcome of your tax issues can have a significant effect on your future, so this isn’t necessarily the time to cut corners to save a little bit of money. It could end up costing you more down the road if you get a less experienced tax pro.

National vs. Local Companies—What You’ve Heard and What’s Really True

There’s a strange dichotomy in the world of tax relief companies. National corporations with offices and professionals across the country are viewed as more experienced, reliable, and knowledgeable, but as explained above, this isn’t necessarily true. However, their big reputations also mean that they can get away with charging more than their local counterparts.

Small tax relief firms may not have as solid of a reputation as national firms, but that’s due solely to their limited geographic reach. People looking for assistance may think that small firms have less to offer and less knowledge of intricate federal tax issues. But that’s not true. Tax attorneys who run small tax relief firms are usually extremely experienced with a wide range of tax problems.

These assumptions are just that—assumptions that aren’t based in fact. Companies are often fairly close in price, and there’s nothing indicating that a company with a national presence knows more about federal tax laws than local companies. You really do need to evaluate companies on an individual basis, ask the right questions, and determine which company can address your tax issues.

Key Questions to Ask Before You Hire a Tax Pro

Remember that you are putting your standing with the IRS in the hands of whichever tax relief company you choose. Don’t be afraid to ask questions, verify a company’s credibility, and make them prove themselves to you before you sign a contract or hand over any money. Important questions you may want to ask include:

  • What credentials do you have? You’ll want to choose a tax pro who can answer this question definitively and tell you specifically about their education, training, and certifications. If you’re placed with a sales agent who can only give vague answers about their tax professionals’ experience, that’s not a good sign.
  • Have you handled cases similar to mine before? While everyone starts somewhere, you probably don’t want a new tax specialist to test their education on your case. Look for a tax pro with a good breadth of experience handling different types of tax issues, including complex cases and problems.
  • Can you show me proof of your successful handling of other tax issues? An experienced tax pro will be able to show you proof of their expertise and how they’ve used it to help clients secure the best possible outcome.
  • Can you give me an overview of this process and what role I will play in it? If you’re like most people facing tax issues, you’re overwhelmed and unsure of what your next steps are. You don’t just want a tax pro—you want one who can help you understand what’s going on, the possible outcomes, and what is most likely to happen. You should come away from this question feeling informed and reassured.
  • What happens if this doesn’t go my way—what are the next steps? This is an important question because there is always a possibility that your tax case won’t have a favorable outcome. The odds may be low, and your tax pro may have never had a poor outcome in a situation similar to yours, but it is a possibility. You’ll likely want to hire a tax professional who can tell you the odds of a poor outcome and what your options are should that happen.

Tips to Help You Choose the Right Tax Relief Company

Now that you know more about what to look for in a tax relief company, you’re well on your way to selecting a company that can help you address your current issues. Some tips to guide you on your path include:

  • Look at reviews and ratings. Make sure you look at reviews from multiple sources before making your final choice. The reviews on a professional’s page are helpful, but they are curated. You should also look at reviews on platforms that don’t allow businesses to delete negative reviews—this will give you a clear picture of how satisfied their clients are.
  • Turn to your network. If you’re comfortable talking to your loved ones or professional contacts about your tax issues, don’t be afraid to ask them for recommendations or referrals. Even if they’ve never had tax problems, they may have a tax pro in their circle whom they trust and can wholeheartedly recommend.
  • Schedule consultations. Take advantage of the free consultations offered by many tax relief companies. These aren’t just extended sales pitches meant to lure you in. When you choose legitimate tax relief companies, your consultations can actually be a great source of information and guidance. Have a list of questions prepared and know exactly what you want to get out of each consultation.
  • Consider the benefits of hiring a local professional. When you work with a local tax pro, you get the chance to choose someone who is trusted and well-known in your community. This protects you from unintentionally choosing a fly-by-night company that will take your money without delivering any results. Local firms also tend to have strong communication skills and pride themselves on being accessible to their clients. Finally, since they have lower overhead and marketing expenses than the big corporations, you know where your money is going and what it’s doing for you.

Making an Informed Decision

Taking control of your tax situation allows you to determine your financial future. While exploring your tax relief options, prioritize firms that are transparent about their operations and offerings, bring substantial experience to the table, and keep you in contact with the tax pro handling your case.

When it comes to consultations, know what you want to get out of your time with a tax pro and let your specific needs guide your decision-making process. Ready to move forward? We’d love to talk to you more about your options. Call the Timothy S. Hart Law Group, P.C. at 518-213-3445 to set up a meeting at our Albany office or call 917-382-5142 to meet at our New York City office. You can also reach out online for help. Let us provide you with the personalized, experienced help you need.

Attorney Timothy Hart

Timothy S Hart, the founding partner of the tax law firm of Timothy S. Hart Law Group, P.C. is both a New York Tax Lawyer & Certified Public Accountant. His area of expertise includes innovative solutions to solve your Internal Revenue Service and New York State tax problems, including tax settlements through the Federal and New York State offer in compromise programs, filing unfiled tax returns, voluntary disclosures, tax audits, and criminal investigations. [ Attorney Bio ]