The tax relief sector has undergone major changes in recent years. As the economy deteriorated and Americans came under increasing financial pressure, many individuals and businesses sought relief by not paying their taxes. In response, a large number of tax firms began popping up to meet the unprecedented demand for tax services. The tax gurus who advertise late at night on TV and radio “will settle your tax debt for pennies of the dollar.” Although we are tax experts, we were unable to determine which tax companies are good and which are bad.
Tax offices: choose the right one for you
Under the umbrella of “tax relief firms” there are three types of professional firms: law firms, accounting firms, and hybrid firms. The first two types are self-explanatory, and since there isn’t really an industry standard name for the latter category, it’s probably fine to call them “hybrids.” But which of the three categories suits you best?
As you know, a law firm consists ONLY of lawyers. A law firm may employ assistants such as paralegals, but a tax attorney is ALWAYS ultimately responsible for all tax work performed. All tax attorneys employed by a law firm are subject to the ethics rules and disciplinary action of their state bar. A tax attorney can generally represent any client in any state in any U.S. federal income tax matter.
The benefits of hiring a law firm are that you can rest assured that (i) a lawyer is ultimately responsible for your tax affairs, (ii) you have a clear method for filing complaints (i.e. (i.e. at the state bar) if the attorney is involved and (iii) attorneys are subject to strict ethical rules so they must operate to the highest standards.The drawbacks are that law firms are generally more expensive than the other two types of tax firms. In addition, some law firms (or attorneys ) do not rely exclusively (or even primarily) on tax-related work, so they may lack some of the skills and experience needed to handle tax matters. Just ask your attorney what other type of work he does, and you get a sense of whether taxes (and especially tax credits) are his specialty go to https://www.taxfortress.com/.
In CPA offices, of course, you will find CPAs (i.e., chartered accountants), but you can also find tax attorneys. As with law firms, it is good to know that in CPA offices there is a professional behind the scenes who is ultimately responsible for all tax work done on your behalf. The pros and cons of CPA firms are similar to law firms, except that the method of reporting complaints to CPAs is not as well defined (but it does exist) as it is for attorneys. CPA firms are generally slightly cheaper than law firms.
Hybrid companies include tax deduction companies that are not law or accounting firms. Tax relief companies in this category employ a mix of tax professionals, including tax attorneys, CPAs, and so-called “registered agents.” Enrolled agents are IRS-certified tax professionals. They are not attorneys or CPAs, but tax professionals who, according to the IRS, are qualified (by research or experience) to represent taxpayers before the IRS.
Many tax deduction companies fall into the “hybrid” category. Many tax offices that advertise on the Internet and on the radio are staffed by tax attorneys, CPAs, and registered agents and are therefore hybrid tax-deductible companies. The advantages are that these companies generally charge less for tax breaks and are very good at providing tax services and working with the IRS as tax controversy is their specialty. The downsides are that, unlike law firms and accounting firms, these hybrid firms are largely unregulated.