Here we answer: Do tax settlement companies really work?
The answer is yes if they stay open long enough to complete your case.
Tax settlement companies, also known as tax relief companies, work if they stay open long enough and your numbers actually work for a tax settlement. The list of tax relief companies that are no longer open goes on and on. Some names include JK Harris, American Tax Relief, and Blue Tax. Clients typically are left in the dust with no one to complete their case.
Tax relief company downsides
Another downside of many tax relief companies is they lead many to believe their settlement odds are better than they really are.
If you hire a tax law firm instead to complete your case, they are obligated to complete it. If they cannot complete it for some reason they are obligated to transfer your case to a competent attorney. Otherwise, the attorneys can get suspended or even disbarred.
Tax relief companies are owned by unlicensed professionals and generally are a corporation or LLC. If their finances go bad there is no liability they can just close on you. Unfortunately, this happens quite often.
That’s why we would not recommend hiring a tax relief company. Plus they generally cost more than many tax attorneys, particularly on simpler cases. Also, some cases where a tax relief company, and even some tax attorneys, may try to get you to hire them, are actually super simple and you can do it yourself.
For more about fraudulent tax relief companies, see our big tax relief company guide here.
Are you here because you’re looking for help with your IRS debt?
If you are doing your case yourself check out our free tax help guide here.