With unemployment heading for a historic high of 32%, SMEs (small and medium-sized enterprises) are hurting. Consumers aren’t spending money, most non-essential businesses have been forced into closures due to restrictions and tax obligations from last year and years past are still expected to be paid.
If you’re wondering how you’re going to pay back taxes you owed before this crisis hit now that you’re likely to take severe losses over the next year or so, tax relief services have likely been a solution you’ve considered.
While the idea of tax relief services is a good one, not all services are legitimate. Below, we share a few hacks you can use to avoid relief services that may do more harm than good.
1. Do a Reputation Audit
The easiest way to tell legitimate tax relief services from predatory ones is to do a reputation audit. Type in the name of whatever relief service you’re considering working with into a search engine. From there, inspect what feedback they’ve gotten from consumers on Yelp, Google and other well-known review aggregation sites.
Relief services with poor feedback or no feedback are best avoided.
2. Be Wary of Guaranteed Debt Relief
There are no guarantees when it comes to reducing your debt burden with the IRS. To qualify for a settlement, you must meet very specific criteria that there’s no way a tax relief service can know you align with before working with you.
That’s why your relief service must be clear about the possibility they may not be able to help you. Any service that over promises results is one that’s more interested in collecting non-refundable up-front fees than they are in helping your business.
3. Ensure Services Are Eager to Review Your Financial Situation
No tax relief service can determine your eligibility for a settlement without poring over your financial situation extensively. Because of that, anyone you work with should be eager to schedule a meeting so they can review your returns from previous years, your bankruptcy status (if applicable) and other documents related to your debt.
If a service is pushing more for you to pay their fees than they’re pushing for you to disclose your information, you’re likely amid a scam.
4. Identify Delaying Tactics
A tell-tale sign that a relief service is predatory is them trying to delay the process of giving you an answer on whether or not they’ve managed to reduce your debt. This is done by taking a long time to respond to emails or requesting that you use your W2 generator to run off and send them the same documents repeatedly, among other tactics.
If you have a bad feeling about the professionalism of the group you’re working with, trust that instinct.
Not All Tax Relief Services Are Bad
While several tax relief services will do more harm than good to your company, some are legitimate and can help you reduce your tax burden or qualify for stimulus programs you may not have been aware of.
All of that to say that you should seek tax help when you need it! Just vet the organizations you do business with carefully to avoid ending up worse off than when you started.
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