Are you still trying to ignore that tax debt?
Most people wait until it’s too late and the Internal Revenue Service (IRS) or state finally loses patience. That’s when things get serious. They might hit you with a tax lien on your property or freeze your bank account with a levy, taking money directly from your account to cover what you owe.
The real problem? Many taxpayers don’t realize how much it costs to fix this mess until they’re too deep. Personal cases usually start around $3,500 to $5,000, and complex business cases can go even higher. It’s easy to feel trapped, wondering if you’re paying too much or if there’s a better option out there.
If you’ve landed on this page, you’re likely looking to avoid surprise fees by understanding how much does tax resolution services cost.
Read along to discover the factors affecting tax resolution service costs and what you can expect to pay to resolve your tax issues effectively.
Check-Out: How The IRS Finds Your Assets?
What are Tax Resolution Services?
Tax resolution is a service provided by tax defense firms to help you deal with any debt you owe to the IRS. Their main goal is to reduce the amount you owe as much as possible since they understand you cannot pay the IRS in full. This service is usually required when someone has unpaid back taxes and has put off taking care of the matter for a long time.
What do tax resolution experts do best that you can’t easily handle on your own? They handle communication and negotiations with the IRS, potentially reducing your tax debt because they understand the IRS inside-out.
Who Needs Tax Resolution Services?
If you owe back taxes, are under audit, or have errors in your tax filings, these services can make a huge difference. Businesses, especially small and medium-sized ones, often need them when there are discrepancies in financial reporting. Anyone at risk of wage garnishments, IRS bank levy, or tax liens can benefit from professional tax resolution support.
How do I ask the IRS a Question Online?
Instead of skimming through complex IRS websites and forms on your own, why not let Mr. Michael Sullivan take care of it? He has the expertise to get clear, accurate answers and quickly resolve your tax issues when you’re asking, “How do I ask the IRS a Question Online?” No need to wait on hold or struggle through confusing IRS language.
Also Read: Expert IRS Final Notice of Intent to Levy Services
Factors Influencing the Cost of Tax Resolution Services
When tackling tax problems, understanding “how much does tax resolution services cost” is the first thing you should ask. Pricing may vary depending on several important factors. Here are some key elements that affect the price of tax resolution services.
Complexity of Tax Issues
Addressing complex tax matters may result in higher costs, as the intricacies require additional time and expertise to resolve. Just as solving a complex puzzle demands more effort than a simple one, intricate tax issues need greater resources to address effectively.
- Basic Issues: These might include minor discrepancies or filing errors. Such problems can often be resolved with standard procedures.
- Moderate Issues: Involves several years of unfiled returns or incorrect income reporting. They need a bit more digging but can typically be handled efficiently with the right expertise.
- Complex Issues: Complicated cases may include IRS audits, taxpayer disputes, or significant amounts owed. These situations demand intensive work and strategic handling by specialists.
Type of Service Required
Choosing the right tax resolution service depends on your specific needs. Different services come with varying costs. Some of the most commonly sought services are:
- IRS Tax Debt Settlement Help: If you owe back taxes and are struggling to pay, IRS tax debt settlement services can assist in negotiating a reduced amount, potentially saving you thousands.
- IRS Debt Forgiveness Programs: These programs offer relief to taxpayers by reducing or even eliminating tax debt. They’re ideal if your financial situation makes it impossible to pay what you owe in full.
- Tax Lien Release: If a tax lien has been placed on your property, you need to release it immediately to protect your assets and credit. Tax professionals can help remove these liens and get your financial life back on track.
- IRS Audit Reconsideration: If you’ve been audited and disagree with the outcome, IRS audit reconsideration allows you to challenge the findings. This process requires detailed documentation and expert representation to increase your chances of success.
That being said, let’s find out the average costs of services you may avail:
| Service | Average Cost |
| Discovery/Investigation Fee | $250 – $750 |
| Offer in Compromise | $2,000 – $7,500 |
| Installment Agreements | $1,500 – $5,000 |
| Penalty Abatement | $250 – $1,000 |
| Innocent Spouse Relief | $3,500 – $5,000 |
| Currently Not Collectible | $1,500 – $4,000 |
Note: The average rates and the demand in the market change with time. Before committing to anything, please tally the current rates and decide what fits your needs.
Also Read: Protect Your Finances: IRS Tax Audit Defense Solutions
What are the Costs of Tax Resolution Services IRS?
When it comes to resolving tax issues, you may wonder about the expenses involved. Knowing the costs can help you make informed decisions if you’re facing tax problems. You may encounter terms like hourly rates and flat fees. This guide will provide a clearer picture of what to expect.
Hourly Rates versus Flat Fees
Choosing a tax resolution firm often boils down to deciding between hourly billing rates and flat fees. Both options have their pros and cons:
Understanding Hourly Rates vs. Flat Fees for Tax Resolution Services
Hourly Rates:
- How It Works: You are billed based on the number of hours spent on your case.
- Typical Rates: Tax attorneys and professionals usually charge between $200 to $550 per hour.
- Best For: Less complex issues where the time required is uncertain. This option allows you to pay only for the actual time spent on your case, assuming the firm bills accurately.
Flat Fees:
- How It Works: You pay a predetermined amount for the entire service, regardless of the time spent.
- Typical Costs: Flat fees for tax resolution services generally range from $3,500 to $5,000, depending on the complexity of your case.
- Best For: More predictable when dealing with complex IRS issues, as it provides cost certainty, which can be helpful if you are managing a tight budget.
Choosing the Right Option:
- Hourly Rates: Suitable for simple cases with an uncertain timeline, where you can potentially save money and time if the case is resolved quickly.
- Flat Fees: Ideal for complex cases where you need assurance of cost, or if your case involves extensive negotiations with the IRS.
Also Read: How do I find out if I owe back taxes?
Is Tax Resolution Worth the Cost?
Finding yourself in a tax crisis can be overwhelming, and deciding whether to invest in tax resolution services is a big decision. The cost can range from a few thousand to tens of thousands of dollars, depending on your situation. So, is it worth it? Let’s have a look:
- Reducing Tax Liabilities: Tax resolution experts can negotiate with the IRS to lower your tax debt, potentially saving you a significant amount. While the upfront costs might seem high, the potential savings can be much greater if your tax bill is reduced or you secure a manageable payment plan.
- Preventing Wage Garnishments and Bank Levies: If you’re at risk of having your wages garnished or your bank accounts frozen by the IRS, tax resolution experts can intervene. They can negotiate with the IRS to stop these actions, giving you the breathing room you need to manage your finances.
- Avoiding Asset Seizure: The IRS has the authority to seize assets, including your home or business, to cover unpaid taxes. Tax resolution experts can negotiate payment plans or settlements to prevent this drastic action.
- Improving Credit Score: Unresolved tax debts can negatively impact your credit score. By resolving your tax issues, you can start rebuilding your credit, which is crucial for securing loans, mortgages, or even renting a home.
- Eliminating or Reducing Tax Liens: A tax lien can make it nearly impossible to sell or refinance your property. If you avail these services you can get liens lifted or reduced, making it easier for you to manage your assets.
- Ensuring Compliance with Tax Laws: Tax laws are complex and constantly changing. Tax resolution experts help ensure you’re compliant with all regulations, reducing the risk of future issues and penalties.
Also Read: Understanding IRS Tax Fraud: What is Tax Fraud? – Expert Services
IRS Can Reject Your Payment Plan If You Have Unfiled Tax Returns
Many of you don’t realize how important it is to stay up-to-date with all tax filings to qualify for an IRS payment plan. Even if you owe back taxes, the IRS won’t approve an installment agreement or other payment options if you have unfiled returns. This means you could be denied a payment plan, leaving you vulnerable to more severe collection actions like wage garnishments and bank levies.
If you’re wondering, “Can you have multiple IRS payment plans?” The answer is no—the IRS typically only allows one active payment plan at a time. This makes it even more crucial to ensure all your returns are filed and your plan is set up correctly to avoid unexpected disruptions.
If you’re dealing with serious tax debt, penalties, or the risk of an IRS audit, working with an IRS consultant can make a big difference. While these services have a cost, they can help reduce what you owe and protect your future.
