Many or all of the companies featured here provide compensation to us. This is how we maintain our free service for consumers. Compensation, along with hours of in-depth editorial research, determines where & how companies appear below. Advertiser Disclosure

Many or all of the companies featured here provide compensation to us. This is how we maintain our free service for consumers. Advertiser Disclosure

Many or all of the companies featured here provide compensation to us. This is how we maintain our free service for consumers. Compensation, along with hours of in-depth editorial research, determines where & how companies appear below. Advertiser Disclosure

Many or all of the companies featured here provide compensation to us. This is how we maintain our free service for consumers. Advertiser Disclosure

Best Tax Relief Companies

A tax relief company may be able to help you negotiate a payment plan or settlement with the Internal Revenue Service (IRS) and save you money on your tax debt. However, it’s important to keep in mind that not all tax relief companies are reputable – this is why we evaluated all major tax relief companies and compiled this guide for you.

Optima Tax Relief is our #1 Choice for Tax Relief

What Is Tax Relief?

When it comes to taxes, relief is available in many forms. From universal cuts, to benefits specifically tailored to certain groups of taxpayers; government policies are designed to help people and businesses ease the financial burden of taxation. A prime example of this is the Child Credit, a program that grants parents of minor children a break on their taxes. Similarly, green improvements such as energy-efficient windows also have a dedicated scheme in place – one which furthers initiatives such as U.S. energy independence and better air quality.

For taxpayers struggling with their taxes, there are several initiatives that can assist in alleviating their financial burden. These programs offer deductions, credits, and exclusions to help lighten the blow of taxes. Additionally, those who have fallen behind on their debts may be able to enter into settlements with the government to avoid any type of lien being placed upon them.

In order to help address the issue of inadequate retirement savings in America, Congress has taken it upon itself to modify the federal tax code. This is done in the form of offering incentives for citizens to take advantage of tax-advantaged savings accounts—like IRAs and 401(k)s—so they can increase their financial security later in life.

In 2021, the IRS has extended a helping hand to many who have been adversely impacted by natural disasters. Such relief was offered in the form of delayed filing and payment deadlines, forgiveness of penalties and interest charges, as well as deductions for any damage or theft resulting from officially designated catastrophes. These include storms, tornados, flooding, hurricanes, straight-line winds, wildfires and drought that have caused disruption for residents across the country.

How Do Tax Relief Companies Work?

In recent years, it has become common to see advertisements from various companies claiming they can provide taxpayers with relief from their debts. Many of these businesses use the internet, radio, and television to promote their services. The most useful service they advertise is negotiating with the IRS on behalf of individuals struggling with taxes.

By hiring a good-standing company to help you out, you could potentially benefit from an offer in compromise, installment agreement, or penalty or interest abatement which would otherwise be unreachable without professional assistance. 

Choosing a reliable third party representative to handle your taxes is essential. The Federal Trade Commission (FTC) emphasizes that only certain professionals are allowed to speak on behalf of you with the Internal Revenue Service (IRS). These include:

  • Enrolled agents, who have been granted federal authority for tax matters.
  • Certified Public Accountants (CPAs), who specialize in taxation.
  • Attorneys, who provide legal counsel for taxpayers. 

It’s important to consider a few key things before you hire a third party to represent you. Firstly, check for any upfront fees, refund policies, and default billing rates that come into play in the event of cancellation. Additionally, the FTC suggests meeting with any potential tax professionals to discuss your options and the applicable fee structure before parting with any money or signing an agreement.

Below are some ways they may be able to assist in clearing your tax debt to avoid tax liens or wage garnishment.

  • Negotiate with the IRS on your behalf. The tax relief company will work with the IRS to establish an Offer in Compromise, installment agreement, or penalty or interest abatement. Note that it’s extremely rare to get an Offer in Compromise approved, and any company that guarantees they will get you one is a scam.

  • File appeals. If you’ve applied for an Offer in Compromise or another settlement option, but the IRS has denied your application, a tax relief service can intervene on your behalf to appeal the ruling.

  • Tax audit representation. You have the legal right to represent yourself before the IRS. However, a tax relief firm usually has a tax attorney on staff who can represent you instead.

How Much Do Tax Relief Companies Charge?

The type of payment structure a company requires can vary widely, particularly when it comes to tax relief. For instance, while one company may require full payment upfront, another might be willing to accept monthly payments until the case is resolved. Still, others may operate on an hourly rate basis and have a minimum amount of debt that must be present in order for them to offer their services.

It is critical to thoroughly research any company you are considering working with prior to executing contracts or payments. Taxpayers in situations of financial constraints and distress are often targeted by unscrupulous individuals preying on their fears. To protect yourself, make sure you confirm the company’s trustworthiness with the Better Business Bureau and other consumer watchdogs. Should you discover a potentially fraudulent organization, the IRS Office of Professional Responsibility can be contacted using Form 14157 so they may take action.

When it comes to tax resolution services, pricing varies and can range from $3,500 up to as much as $7,000. Hourly rates for such cases vary from $200-$1,000. Generally speaking, the more intricate an issue is the higher the fee may be. A situation like securing an Offer of Compromise will cost more than negotiating a simple installment plan.

The IRS may require additional documentation and information which will necessarily make the fees associated with filing more expensive. This is due to the longer amount of time needed for putting these items together. People whose businesses are structured as C corp or S corp should be even more prepared to face higher costs.

When considering tax relief costs, it is important to factor in unpaid taxes as well. Generally speaking, a higher liability will necessitate more paperwork and financial records for it to be satisfactorily addressed. For instance, a business that owes more than $50,000 to taxing authorities is likely to incur a steeper rate since much more documentation must be provided. On other hand, owing less than this amount might come with fees that are lower because fewer documents need to be furnished in order for their predicament to be resolved.

Below are average fees for tax relief options offered by resolution companies.

  • When it comes to preparing taxes that haven’t been filed, the cost can range from as low as $500 for partnerships and corporations to up to $2,000 depending on how complex the return is.
  • An Installment agreement usually costs between $2,500 and $3,500 but may be higher for business related taxes.
  • On the other hand, a Partial Payment installment agreement can be more expensive due to the amount of work required and fees range from $3,500 to $5,000.
  • When applying for Penalty abatement proof of financial hardship is necessary and fees typically fall between $250 up to$1,000 plus an additional percentage based off of reduced penalties.
  • For an Offer in Compromise (OIC) pricing ranges from $4,000 -$7,500 while Current Not Collectable (CNC)

Should You Hire A Tax Resolution Company?

Having knowledge of the costs associated with tax debt relief, you may still ponder whether it is worth it to employ a specialist in the area. To help you make an informed decision, here are some factors that might convince you of the benefits of hiring a reliable, fully verified tax resolution service.

  • No need to communicate with the IRS – that alone can be a total game changer. After all, dealing with them is often seen as an intimidating and tedious experience.
  • Knowledgeable negotiators, also known as Enrolled Agents or tax attorneys on staff at tax relief companies can find the right solution suited to your financial capability.
  • Another great advantage of hiring their services is they are up-to-date when it comes to understanding tax code which makes the whole settlement process much faster than doing it yourself.
  • Tax professionals from these organizations have plenty of expertise when it comes to resolving tax debt quickly and efficiently compared to trying to do it on your own.
  • Lastly, having access to experienced and knowledgeable agents gives taxpayers the upper hand in settling their debts with the IRS more speedily than going solo.

It goes without saying that the decision to hire a tax relief service should be based on the value of your tax liability. Generally, those with a tax obligation of less than $10,000 may not find it worthwhile to pay for such services. Keeping up-to-date records is essential to understanding how much you owe and when. 

How To Find A Reputable Tax Relief Company

Tax resolution companies are not all created equal, with numerous unscrupulous businesses scamming individuals out of their hard-earned money. Reports made to the Federal Trade Commission (FTC) indicate that unsuspecting victims have suffered both unauthorized credit card charges and bank withdrawals without receiving any services. It’s a dire situation, where too many people are taken advantage of.

When seeking out a trustworthy tax relief company, consider the following:

  • When shopping around for tax relief services, it is important to be skeptical of companies advertising on TV, radio, and online.
  • In particular, beware of those that make promises that seem too good to be true and exaggerate the speed at which your case will be resolved.
  • A much better option is to look for a company with an excellent reputation and a proven track record in helping other clients through their own tax issues. Ask trusted business owners who have used the service for references too.

This should help set your mind at ease before you commit to anything.

How Do Unpaid Taxes Affect Your Credit?

Though you may worry that your tax bill owed to the federal government may affect your credit scores, it is no longer a cause for concern. Your ® Score or VantageScore® will not be impacted by tax liens as they are no longer included in credit reports. Nevertheless, it is important to note that although this is true when applying for a loan or financing, some lenders may reference public records which could showcase unpaid liens. In addition, if taxes keep you from making other payments on time, then your credit scores could still be impacted negatively.

Ways to Get Tax Relief

When it comes to strategies for managing taxes you can’t afford to pay in full when they’re due, you have several options. Below are four methods to consider.

  • IRS Repayment Plan
    The Internal Revenue Service can offer taxpayers with significant tax debts the opportunity to pay what they owe in installments. To be eligible for a long-term payment plan – that is, paying over 120 days or longer – you must owe no more than $50,000 combined in taxes, penalties, and interest. When it comes to short-term arrangements of 120 days or less, the amount owed can rise up to $100,000. It should be noted however that these repayment plans come with certain costs; it’s possible you may need to pay a setup fee of up to $149 plus penalties and interest until your debt is fully repaid.
  • Offer in Compromise
    Financial hardship can make it difficult to pay the full sum of your taxes. In this case, the IRS may consider an option known as an “Offer in Compromise”, which permits you to settle your debt for a lesser amount. The organization will evaluate various factors when considering whether or not to accept your application – such as income, expenses, and assets – before making a decision. To determine eligibility and get started on submitting an initial proposal, you can visit the IRS site dedicated to OIC and use their pre-qualifier online tool.
  • Penalty Relief or Interest Abatement
    The Internal Revenue Service (IRS) may provide a tax break for those who meet certain requirements. That relief can come in the form of reduced penalties or waived interest on unpaid taxes. You must not have any current penalties, not have had any in the last three years, and have either paid what you owe or be making arrangements to do so. Even though you still have to pay the overall debt owed, your balance will be lower after the IRS takes off all relevant penalties. For more information on these opportunities, consult the IRS guidebook concerning individual tax relief benefits. Interest forgiveness is less common but still an option that a few taxpayers may qualify for.
  • Personal Loan
    For taxpayers who lack the resources to meet their tax bills on their own, borrowing may be a solution. Before taking out a loan, compare interest rates and terms with what the IRS can offer you. Furthermore, take time to review your credit reports since this will give you insight into what lenders will analyze when deciding whether or not to approve your loan application. In this way, consumers can make sure they’re getting the best available rate on their loans.

Tax Deductions

Reducing your taxable income through tax deductions can bring your tax bill down.
Taxpayers who choose to reduce their taxable income have the option of taking the standard deduction or itemizing their deductions on Schedule As of 1040 and 1040-SR forms. However, individuals cannot opt for both methods simultaneously.

When filing your income tax return, your standard deduction amount is determined by a few factors. These include your filing status, age, and whether you or another person have claimed you as a dependent.

Standard Deductions for 2022 and 2023
 Filing Status2022 Standard Deduction2023 Standard Deduction
Married Filing Separately$12,950$13,850
Head of Household$19,400$20,800
Married Filing Jointly$25,900$27,700
Surviving Spouses$25,900$27,700

Individuals filing their taxes who are 65 or older or legally blind can benefit from an extra deduction in 2022 and 2023. For the tax year of 2023, this is an additional standard deduction of $1,400 ($1,750 for those single or head of households) which doubles to $2,800 for those both 65 or older and blind. For 2023, this increases to $1,500 ($1,850 for singles and heads of households)

Getting a bit older can provide some tax benefits. For those aged 65 or over, or those with legal blindness by the end of the tax year in 2022, there will be an additional standard deduction available. This number is $1,400 ($1,750 for single or head of household). Additionally, this amount doubles for those both 65 and above and legally blind. In 2023, this number rises to $1,500 ($1,850 for single or head of household).


Rather than take the standard deduction, itemized deductions represent expenses that can be subtracted from your adjusted gross income to reduce your taxable amount and the amount of taxes you must pay. To really benefit from itemizing, it is only logical that the total deductions end up being higher than the default exemption for your specific filing status. Common types of itemized deductions include:

-Mortgage interest and discount points on the first $750,000 of secured mortgage debt (or $1 million if you bought the home before Dec. 16, 2017).

-Charitable donations.

-Unreimbursed medical and dental expenses.

-State and local taxes (SALT).

-Certain gambling losses.

-Investment interest expenses.

Tax Exclusions

Relieving the stress associated with significant tax debt is no easy task, but the IRS Fresh Start Program can provide some relief. You may be able to tackle this problem independently, although it might be wise to enlist help from a reliable tax relief company. Such an endeavor could potentially help lessen your burden and ease your worries.

What is a Tax Relief Scam?

Tax relief scams refer to fraudulent schemes that promise to reduce or eliminate a taxpayer’s tax debt for a fee. These scams can take many forms, such as false promises of loan forgiveness or claims that the taxpayer is entitled to a large refund. The scammers often impersonate IRS agents or use official-looking forms and documents to trick people into paying them money. It is important to remember that the IRS will never initiate contact with taxpayers via phone or email, and taxpayers should always be wary of unsolicited offers of tax relief. To avoid being a victim of a tax relief scam, taxpayers should only use reputable tax professionals, research any offers of help, and never provide personal or financial information to unsolicited callers or emails.

Are Tax Relief Companies Legitimate?

Tax relief companies can be legitimate, but it’s important to be cautious and do your research before using one. Some tax relief companies may use questionable tactics, make false promises, or charge excessive fees. Therefore, it’s important to only use reputable tax relief companies and to thoroughly research their services and fees before engaging their services. The Better Business Bureau and the National Association of Tax Professionals are good places to start when looking for a reputable tax relief company. Additionally, taxpayers can consider seeking assistance from a tax professional, such as a CPA or enrolled agent, or they can look into free tax assistance programs, such as the Volunteer Income Tax Assistance (VITA) program, which is sponsored by the IRS.