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When you owe the IRS or state back taxes, it is important to find a reliable tax professional you can work with to help you resolve your tax problems. These tips will help you avoid scams and find a tax professional that you can work with to solve your tax situation.
Owing the IRS or state back taxes or having late tax returns can lead to some harsh consequences. The IRS legally has the more powerful collection mechanisms than any bill collector in the United States. Not only will they continue to hit you with steep penalties and interest, they have the right to take your most prized assets you own against your will. When getting help from a tax professional, it is important to know what to look for and what to look out for in tax resolution companies.
Step 1:

Locate several tax professionals/tax resolution firms - It is very important to talk with more than one tax professional when trying to hire one. All tax professionals have different methods and specialties. You may find that one type of tax professional, such as a tax attorney, will be able to handle a more complex tax issue than a CPA could. There may be a huge difference in prices as well and it is important to get multiple price quotes.  To find a tax professional or tax resolution firm you can check with your local tax preparer, online advertising through your favorite search engine, local bar association, national association of enrolled agents or from the state or local CPA Society.

Step 2:

Watch out for a Retainer Fee - This is normally not a good sign if they talk about having a retainer fee.  Under this sort of agreement, the company has the right to change the price on you when a final agreement is made.  So there is no way what the service will end up costing you and they may try to take more than they are actually entitled too based on the settlement they get you.  It is best to look for a company that offers a flat fee for their services.

Step 3:

Stay away from "Pennies on the Dollar Advertisements" - These types of advertisements are normally a scam. They are advertising the offer in compromise program that very few people qualify for and if anyone promises you that they can get this for you without knowing your situation, it is a scam. A tax professional should offer you a free consultation to hear your situation, then they can make a judgment of what type of agreement you should use with the state or IRS to settle tax debts.

Step 4:

Don't fall for pressured direct solicitation - If you have a tax lien placed on you, it is possible for tax resolution companies to get your phone number.  There are several companies out there that do this and they will call you and say they can help. Typically these are companies with bad reputations that are trying to get clients through direct solicitation because they can't get anyone to come to them.

Step 5:

Check the Company out with the Better Business Bureau - Once you decide on a company or have narrowed it down to 2 or 3, check them out with the BBB. Check out their rating and see if they are rated as satisfactory.  Also, be concerned if they are not listed there.

Once you have chosen a tax professional/tax resolution firm, be sure to be upfront and honest about your financial situation so they can assure you the best outcome for your situation. Remember, the IRS has many methods of settlement for every person in every financial situation, don't end up stuck in a difficult financial situation.
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