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Dealing with delinquent tax debt can be scary, even for the most seasoned taxpayers. If you don’t pay off what you owe quickly, the letters from the Internal Revenue Service (IRS) arrive with increasing urgency, the penalties and interest accumulate and the fear of more severe consequences like wage garnishment or asset seizure can create a persistent sense of dread. It’s common for these types of issues to compound, though, as many people are unsure of what to do or where to turn when confronted with significant tax problems — or what options might exist.
What makes IRS tax debt particularly stressful is the power differential. The IRS is one of the most formidable collection agencies in the nation, with extensive authority to pursue unpaid taxes. Meanwhile, most taxpayers have a limited understanding of tax law, IRS procedures or their rights as taxpayers. This knowledge gap often leads people to either ignore the problem — which inevitably makes it worse — or results in them falling prey to companies making unrealistic promises about tax debt resolution.
The good news is that if you’re in a similar position, you don’t have to face the IRS alone. There are tax professionals who can help taxpayers resolve their tax debt, often securing more favorable terms than taxpayers could negotiate on their own. But who exactly can you turn to for help with IRS tax debt?
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Who can help me with IRS tax debt?
If you’re struggling with IRS tax debt, here’s who you can turn to for help:
Certified public accountants
Certified public accountants (CPAs), especially those with tax specialization, can be valuable allies when dealing with tax debt. They have extensive knowledge of tax law and accounting principles, allowing them to analyze your financial situation comprehensively.
A CPA typically begins by reviewing your tax returns to identify any errors that might have contributed to your tax debt and may recommend filing amended returns if necessary. CPAs can also represent you before the IRS, negotiate payment plans and help with other potential solutions.
There are some possible limitations of working with a CPA, though, including the high hourly rates many CPAs charge. And, while all CPAs understand tax law, not all specialize in tax resolution specifically, so their expertise with complex IRS collection issues may vary.
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Enrolled agents
Enrolled agents (EAs) are federally licensed tax practitioners who specialize in taxation and have unlimited rights to represent taxpayers before the IRS. EAs must pass a comprehensive examination covering all aspects of federal tax law or have relevant experience as former IRS employees.
The process with an EA typically involves a thorough review of your tax situation, including unfiled returns and existing assessments. They’ll develop a strategy for addressing your tax debt, which might include negotiating installment agreements, requesting penalty abatement or pursuing other resolution options.
EAs often charge less than CPAs while offering similar representation capabilities for tax matters. However, they may have less comprehensive financial planning knowledge than CPAs, which can be less than ideal if your tax issues are intertwined with other financial complexities.
Tax attorneys
Tax attorneys bring legal expertise to tax debt resolution and are particularly valuable for complex cases involving substantial amounts of tax debt, potential criminal issues or situations requiring litigation.
The process of working with a tax attorney begins with a legal analysis of your tax situation. Tax attorneys can navigate complicated procedures like Offers in Compromise, innocent spouse relief and Currently Not Collectible status. They also provide crucial attorney-client privilege, which can be important if there are concerns about tax fraud or criminal exposure.
The main limitation of tax attorneys, though, is the cost. They typically charge the highest hourly rates among tax professionals. However, for complex cases or those with potential legal implications, this investment can be worth it.
Tax relief companies
Tax relief companies employ teams of tax professionals — often including CPAs, EAs and tax attorneys — to help you address tax debt. They typically market themselves as one-stop solutions for tax problems.
The process of working with a tax relief company usually begins with a consultation to assess your situation. If you proceed, they’ll develop a resolution strategy, which might include filing missing returns, negotiating with the IRS and implementing appropriate relief programs.
While tax relief companies can provide comprehensive support, though, the quality can vary significantly. For example, some may make unrealistic promises about reducing tax debt or charge high upfront fees, so it’s important to research any tax relief company thoroughly before engaging in services.
The bottom line
No matter how overwhelming your IRS tax debt may seem, there are professionals who can help you find a path forward. But whether you choose a CPA, an enrolled agent, a tax attorney or a tax relief company, the trick to resolving your IRS tax debt is to take action as soon as possible. The longer you wait, the more penalties and interest can accumulate, making the situation even harder to resolve. By seeking professional assistance now, though, you can take control of your financial future and work toward a fresh start.
