Here’s How to Evaluate a Tax Relief Firm from a Cost Standpoint.

Here’s How to Evaluate a Tax Relief Firm from a Cost Standpoint.

Note: you should refer to a tax attorney. Tax attorneys have the highest level of representation and credentials and can offer more options to you compared to a CPA or an enrolled agent. You need to know all your options. The first step is for you to know what the IRS is using against you.

When you owe back taxes to the IRS, the last thing you need is another bill.  That’s why we’re sure that the first question you have is, “How much is this going to cost?” It’s smart to do your homework, and we want to help you find your best options. Your first step is to know what the IRS is using against you via a Comprehensive Tax Transcript Review & Compliance Check. We charge a minimal $347 fee.  

Our 40 years of helping taxpayers solve tax debt problems have given us unique insight into the price ranges licensed tax resolution companies charge. We’ve tapped into that experience to prepare a pricing guide of tax resolution services costs. This will help you create an initial budget for hiring a tax resolution firm or a licensed tax attorney to help you solve your tax problem.

Armed with this valuable information, you can get a rough idea of what your legal fees might be. Then you can compare them to other options, and make an informed decision about what your course of action needs to be, and what you can realistically afford.

Here’s How it Works.

Tax relief professionals charge fees for their services. The way they calculate and assess these fees vary widely by the firm, but they are generally categorized as Flat Fee, Hourly Rate or Flat Fee + Hourly Rate:

A flat fee covers the estimated time and out-of-pocket costs to resolve a tax problem from beginning to end, including tax preparation for an IRS or state issue. Some firms may have flat fees for specific resolutions that vary based on your debt level. This means a sliding scale of fees for a payment plan based on the total amount you owe.

Most tax relief firms and licensed tax professionals bill on an hourly basis, with fees that often range from $200-$550 per hour. A few charge a combination flat fee and an hourly rate.

At Tax Problem Solver, the only fee we will quote up front is for the $347 Compliance Check cost. Without first having the proper transcripts from the IRS, concerning your specific situation, it would be a guess. We don't like guessing. Once we have what the IRS knows about you, we can tell you what your next steps should be and how much it will cost.

Knowing What the IRS Knows

A tax transcript review and compliance check is a necessary first step. From our perspective, it's essential – the key that unlocks everything else! It’s how any licensed tax advisor or tax attorney firm like ours can assess the problem, determine the best solution and provide a competitive fee.  

This first step involves obtaining your tax transcripts or transcript information from the IRS or the State. This process is essential, because it identifies your interest, penalties, and tax debt balance for each year (if applicable) as well your tax filing history. Some companies call this a transcript review or compliance check. Others call it an investigation and include a financial analysis.

Once your personal or your business’s financial situation is analyzed, your best negotiation approach with the IRS or State can then be determined.

Here’s How We Work.

Most tax firms, like ours, charge a small fee for this part. A few charge nothing. Those who offer the financial analysis for free typically add the cost elsewhere. A lot of clients who started with one of these gimmick companies are full of horror stories regarding unexpected costs. The reality is, Tax Attorneys, Enrolled Agents, CPAs are real costs and they’re not free.

The Compliance Check gives us the full set of your information that lets us fully diagnose your tax problem. Once this comprehensive review is completed, we arrange a consultation with you to review options and share a tax resolution Game Plan.

How Much is a Consultation?

We do not offer Game Plans for free. The nominal fee for creating a game plan and providing options is $350. However, we will be more than happy to apply the consultation fee against the cost of any services that you hire us to provide, which in effect makes it free if you decide to work with us. And, if you decide to order the Compliance Check from us and you know you'd want a Game Plan, your total cost is $647, saving you $50.

In some situations, the investment $647 for ordering the compliance check and a preparing a tax resolution Game Plan may be all it will cost you to get you on your way to solving your problem. If your tax problem is straight forward our “Game Plan” will give you a full guide as to what your next steps should be. While the steps can be involved or tedious, if you’re resourceful and have the available time, you can often do them yourself, or, as our typical clients choose to do, hire us to do all the legwork for you.

How Much Do Typical Tax Relief Services Cost?

With most clients needing a few years of tax prep, the average case tends to be around $3,500-$4,500 dollars.

If a business, such as a partnership, LLC, C-Corp, or S-Corp, is involved the fees for tax preparation will lead to an overall higher cost, especially if you need to file 940s or 941s. Therefore, for businesses with complex situations, the fees could be in the $5,000 to $7,000 range.

Major tax relief firms that spend a great deal on advertising can charge substantially more for the same services you can find elsewhere. In many cases, many of the firm’s you recognize spend so much on advertising that their fees need to be higher to compensate for marketing costs.

Other Factors to Consider With Pricing.

Although the average case is between $3,500-$4,500 dollars across many companies, it doesn’t mean that you will pay the average. There are many different services offered by tax resolution companies that all vary in price. Usually the more complicated and intensive the service, the higher the cost. For example, typically an Offer in Compromise will carry higher fees than a simple payment plan.

Another factor in the price of the service is the debt amount owed by the taxpayer. As the debt amount increases, the complexity of services usually increase. For example, the IRS requires more documentation and financial information for taxpayers that owe over $50,000 in most cases. A taxpayer who owes less is likely to fall on the lower end of the average pricing while a taxpayer that owes over $50,000 is likely to pay more than the average fee.

But Don't Get Ahead of Yourself – What You Need to Start the Process is that Compliance Check!

A Word of Caution.

Please note that although many tax professionals are reputable and are able to help taxpayers get relief from their tax debt, there are others who charge tremendously overpriced fees for simply handling options not appropriate for a particular situation. For example, many firms will propose an IRS Offer in Compromise, when, as in many cases, this option is not suitable in the first place, will not be accepted by the IRS, and could very well lead to additional charges because the offer wasn't successful.

While this is the most commonly advertised tax debt solution, the number of offer-in-compromise applications that get approved is generally very low. In order to have such a reduction approved, taxpayers must prove that the total amount owed is incorrect, the probability of being able to pay back the full amount is very low or paying back the full amount will result in tremendous financial hardship.

Also, realize that the more complicated your situation, the more scrutiny you’re likely to receive from the IRS. It would be smart to have a tax attorney prepare your financial documents and handle the negotiations. For example, in an Offer in Compromise, this could mean the difference between acceptance and rejection of your offer, or paying more for your offer than would otherwise have been required.

What You Don’t Know Can Hurt You.

To avoid getting ripped off, you should do as much research as possible. Learn about the options for resolving your tax debt and try to get a grasp on what is realistic in your case and what isn’t.

The vast majority of potential settlement clients need to work out a payment plan with the IRS that will allow them to clear out their tax balances over time while keeping both their assets and their dignity.

In addition to cost comparisons, be sure to check into their experience in dealing with the IRS, years in business, specialties, reputation, professional memberships, and, importantly, how easy it may be able to get in touch with the company.

The Bottom Line.

The tax settlement business is a difficult maze of confusing tax laws, deadlines, and IRS procedures. While the IRS does write off millions in tax debt every year, tax procedures are complicated, and although there are legitimate ways that tax obligations can be reduced, accessing them is a painstaking process.

Generally speaking, the more serious and substantial your tax situation is, the more credentialed and experienced the firm negotiating on your behalf needs to be. Those seeking assistance with their unpaid tax balances should have a qualified tax attorney who has years of experience dealing with the IRS.

Tax Problem Solver is a competitively-priced firm with highly experienced tax attorneys and knowledgeable tax professionals who know the ways of the IRS inside and out. A modest fee of $347 will generate that Compliance Check, which will tell us what the IRS knows about you, and a refundable consultation fee when you retain our services, gives you the opportunity to gain tremendous insight into your case and to discover all your options and which one is right for you.

Want to Know More?

Simply schedule a FREE 15-minute overview call and we'll email you. You can reply to the email and tell me the best date and time that you'd like for a phone overview. I take phone appointments from 8 am to 7 pm. You can also email me directly at: or call me at (855) 287-1324. Schedule your FREE 15-minute consultation and learn why I'm the best tax attorney to solve your specific tax problem!

P.S. - When you schedule your appointment, I’m going to send you a few emails sharing my 7-Secrets the IRS doesn’t want you to know, for Free!

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About the Author Larry Heinkel J.D. LL.M

Larry Heinkel is a tax and bankruptcy attorney with more than 38 years experience helping businesses and individuals, solve their state and federal tax problems. Mr. Heinkel has been extremely successful in representing his clients before IRS and DOR, and is known throughout Florida as an expert in tax problem resolution.

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