CBS News
How to find the best tax relief company
Getty Images/iStockphoto
The deadline for Americans to file their tax returns is quickly approaching. So, if you haven’t already, it’s important to file your return with the IRS. That’s true even if you’re one of the many American who will likely owe money to the IRS this year. After all, if you fail to file by the April 15, 2024 deadline, you could face penalties.
While owing money to the IRS can be stressful, especially if you owe more than you can afford to pay, it doesn’t mean you’re on your own. Tax relief companies may be able to help you negotiate what you owe, erase penalties and avoid tax levies on your wages, bank accounts and properties.
But, not all tax relief companies are equal. And if you seek the assistance of one of these companies, you’ll want to find the best one to work with in your unique situation. So, how do you find the best tax relief company to work with? That’s what we will discuss below.
Compare your options among leading tax relief companies now.
How to find the best tax relief company
There are a few things you should look for as you compare your tax relief options, including:
The types of experts they employ
Tax relief companies employ experts to help with late tax filings, negotiations and more. In some cases, those companies require the experts they employ to be regulated, like certified public accountants (CPA), or fiduciaries, like tax attorneys. In other cases, those experts may be workers with no certifications or fiduciary responsibility to you as a customer. Instead, they may simply be trained by the firm they work with on items like negotiating with the IRS or filing paperwork.
Though there may be some cases where the latter could be effective in providing tax relief, it’s typically best to work with companies that employ highly-trained, knowledgeable and regulated tax experts; experts with a proven ability to negotiate with the IRS. After all, if your negotiator is new, or hasn’t been able to achieve many meaningful settlements in the past, they may not be able to provide as much relief as a seasoned expert with many successful IRS negotiations to speak of.
Take advantage of a leading tax relief service now.
The types of services they offer
There are a wide range of tax relief services available and none of them are a one-size-fits-all solution. After all, some filers will have more complex tax situations while others may only need help with certain aspects of their tax debt.
Consider your tax situation to determine the type of company you should work with. If you didn’t file some of your tax returns or have a complex tax situation, you’ll likely be best served by a full-service end-to-end tax relief company that helps with past-due filings, penalties, negotiations and appeals. If you’ve filed all of your returns on time and simply can’t afford the debt you owe to the IRS, a company that focuses more heavily on negotiations and creating effective payment plans might be more fitting to your situation.
Red flags to watch for
Although there are plenty of legitimate tax relief services out there, it’s also important to be cognizant of potential scams. Here are some common red flags to watch for:
- Who called who?: It’s usually a wise idea to only work with companies that you call first. Unfortunately, predatory tax relief companies may look to outbound call centers as a way to generate leads.
- They have poor online reviews: Before you sign up with any tax relief company, search for the company online and read several reviews. If the company has a high number of negative reviews, you’ll likely be better served by other options.
- Large upfront costs: Though some legitimate companies may charge a small upfront fee associated with the work involved in understanding your tax situation, they don’t typically charge larger fees until they’ve provided an effective service. On the other hand, predatory tax relief companies typically try to get as much money out of you as quickly as possible. So, it’s common for them to ask for large up-front costs. If that’s the case, you should probably consider another tax relief provider.
- They make promises too soon: A legitimate tax relief company won’t be able to give you specifics on how they’ll help in your unique situation or how much help they’ll be able to provide until they review your tax documents. If one promises a specific result before they even know what’s going on, they may be attempting to scam you.
The bottom line
Having IRS debt that you can’t afford to pay off can be scary. But it can be easier to deal with when you have an expert on your side. If you’re comparing your tax relief options, look into the experts employed and the types of service the companies you’re reviewing provide to determine which is best for your unique situation.
Moreover, be cognizant of scams and predatory companies. You should be cautious if a tax relief company calls you first, has poor online reviews, wants to charge a large upfront fee or makes promises too soon.
U.S. stocks plummeted in one of their worst days of the year after the Federal Reserve forecast Wednesday it may deliver fewer shots of adrenaline for the economy in 2025 than it had earlier projected.
The S&P 500 fell 178 points, or 3%, pulling it further from its all-time high set a couple weeks ago. The Dow Jones Industrial Average lost 1,123 points, or 2.6%, while the Nasdaq composite dropped 3.6%.
The Fed said Wednesday it’s cutting its benchmark interest rate for a third time this year, continuing the sharp turnaround begun in September when it started lowering rates from a two-decade high to support the job market. Wall Street loves lower interest rates, but the Dec. 18 cut had been widely expected by Wall Street.
Why is the stock market down today?
Investors were unsettled by the Fed’s forecast for fewer cuts in 2025, even though many economists had already been paring their expectations given sticky inflation.
“Markets have a really bad of habit of overreacting to Fed policy moves,” Jamie Cox, managing partner for Harris Financial Group, said in an analyst note. “The Fed didn’t do or say anything that deviated from what the market expected—this seems more like, I’m leaving for Christmas break, so I’ll sell and start up next year.”
The bigger question centers on how much more the Fed could cut next year. A lot is riding on it, particularly after expectations for a series of cuts in 2025 helped the U.S. stock market set an all-time high 57 times so far in 2024.
Fed officials released projections on Wednesday showing the median expectation among them is for two more cuts to the federal funds rate in 2025, or half a percentage point’s worth. That’s down from the four cuts they had expected just three months ago.
“We are in a new phase of the process,” Fed Chair Jerome Powell said. The central bank has already quickly eased its main interest rate by a full percentage point, to a range of 4.25% to 4.50%, since September.
What happened to the stock market today?
Asked why Fed officials are looking to slow their pace of cuts, Powell pointed to how the job market looks to be performing well overall and how recent inflation readings have picked up. He also cited uncertainties that will require policy makers to react to upcoming, to-be-determined changes in the economy.
While lower rates can goose the economy by making it cheaper to borrow and boosting prices for investments, they can also offer more fuel for inflation.
Powell said some Fed officials, but not all, are also already trying to incorporate uncertainties inherent in a new administration coming into the White House. Worries are rising on Wall Street that President-elect Donald Trump’s preference for tariffs and other policies could further juice inflation, along with economic growth.
“When the path is uncertain, you go a little slower,” Powell said. It’s “not unlike driving on a foggy night or walking into a dark room full of furniture. You just slow down.”
One official, Cleveland Fed President Beth Hammack, thought the central bank should not have even cut rates this time around. She was the lone vote against Wednesday’s rate cut.
Wall Street’s worst performers
The reduced expectations for 2025 rate cuts sent Treasury yields rising in the bond market, squeezing the stock market.
The yield on the 10-year Treasury rose to 4.51% from 4.40% late Tuesday, which is a notable move for the bond market. The two-year yield, which more closely tracks expectations for Fed action, climbed to 4.35% from 4.25%.
On Wall Street, stocks of companies that can feel the most pressure from higher interest rates fell to some of the worst losses.
Stocks of smaller companies did particularly poorly, for example. Many need to borrow to fuel their growth, meaning they can feel more pain when having to pay higher interest rates for loans. The Russell 2000 index of small-cap stocks tumbled 4.4%.
Elsewhere on Wall Street, General Mills dropped 3.1% despite reporting a stronger profit for the latest quarter than expected. The maker of Progresso soups and Cheerios said it will increase its investments in brands to help them grow, which pushed it to cut its forecast for profit this fiscal year.
Nvidia, the superstar stock responsible for a chunk of Wall Street’s rally to records in recent years, fell 1.1% to extend its weekslong funk. It has dropped more than 13% from its record set last month and fallen in nine of the last 10 days as its big momentum slows.
“As we wrote in our 2025 outlook a couple of weeks ago, stretched positioning and sentiment left stocks vulnerable to a sell-off,” Jeff Buchbinder, chief equity strategist for LPL Financial said in a note about today’s market sell-off. “The big jump in inflation expectations and related bond sell-off was a convenient excuse. Once support from tech evaporated, no other groups were able to step in to fill that gaping hole.”
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
