Companies Offering State Tax Relief Services

If you have serious tax debt with the IRS or your state, you could face major penalties. Federal and state entities can eventually garnish your wages and place liens on your property. You must move fast to solve your tax debt and avoid these consequences.

Seeking out tax debt relief can involve piles of paperwork and multistep processes. That’s where federal and state tax relief services come in. Staffed by tax experts and attorneys, these companies can help you navigate the path to tax debt relief. Below, we’ll cover the best state tax relief services available.

Reviews of the best companies that provide state tax relief services

Anthem Tax Services

Best service guarantee

4.9 _/5

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Why we picked it

Anthem Tax Services stands out due to its comprehensive service guarantee and a team of enrolled agents, attorneys, and case managers. With a money-back guarantee if it can’t save you money or rework your payments, it offers peace of mind to clients. Its specialization in nationwide individual and business tax debt adds to its credibility and effectiveness.

• Specializes in both individual and business tax debt
• Money-back guarantee

• Results are not always guaranteed
• Process can be lengthy

Loan details

State availability	50 states
Min. tax debt	$10,000
Free consultation?	✅
Initial fee	$250

Larson Tax Relief

Best initial investigation

4.7 _/5

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Why we picked it

Larson Tax Relief is noted for its experienced team of enrolled agents, tax attorneys, and consultants. It offers federal and state tax relief services for individuals and businesses. It offers a free consultation, discovery phase, and a 15-day money-back guarantee. Its focus on protecting assets for individuals, small to midsize companies, nonprofits, and religious institutions sets it apart.

• Experienced team of enrolled agents and tax attorneys
• Free consultation and discovery phase
• 15-day money-back guarantee
• Focus on protecting assets

• Must call to get pricing
• Minimum debt requirement of $25,000

Loan details

State availability	50 states
Min. tax debt	$25,000
Free consultation?	✅
Initial fee	None

Community Tax

Best for debts under $10,000

4.6 _/5

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Why we picked it

Community Tax offers a holistic tax resolution, preparation, and bookkeeping approach. It specializes in resolving federal and state tax debts, offering services such as Offers in Compromise, installment agreements, and audit defense. Its team includes enrolled agents, CPAs, and tax attorneys, ensuring a comprehensive and professional handling of various tax issues.

• Holistic approach to tax resolution
• Experienced team of enrolled agents, CPAs, and tax attorneys
• Specializes in federal and state tax debts
• Comprehensive suite of services

• Lack of transparent pricing
• Initial fee required

Loan details

State availability	50 states
Min. tax debt	$7,500
Free consultation?	✅
Initial fee	$295

How does state tax relief work?

Tax relief can have one of two meanings:

1. For taxpayers not behind on taxes, tax relief means tax deductions, credits, and exclusions. These are all ways to reduce your tax liability to federal, state, and local governments. Working with a professional tax accountant when filing may be worth the cost if they can help you find credits and deductions you wouldn’t otherwise know you qualify for.
2. For taxpayers who are behind on taxes, tax relief refers to several paths available with federal and state governments to form a realistic payment plan for what you owe, pause your payments, or, in some cases, reduce or eliminate your tax debt altogether.

If you’re in the second camp—behind on taxes and needing help—state tax relief is similar to federal tax relief. However, you’ll work with your state comptroller rather than working with the IRS.

Each state may have its own tax relief processes, and not every state offers the same options as the federal government. You can view your state’s tax website to try to understand the options available to you, but if you’re overwhelmed, we recommend hiring one of the best tax relief companies reviewed above, which can help you with both federal and state tax debt.

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Best Tax Relief Companies

What types of state tax relief services are offered?

Every state has its own set of tax relief services (and a few states don’t assess state taxes at all). You’ll need to review your state’s tax law—or find a tax attorney in your state—to better understand your options.

That said, state tax relief services tend to mirror IRS tax debt settlement options, including the following:

‘Currently not collectible’ status

“Currently not collectible” (CNC) is an official status with the IRS, but some states may also allow taxpayers to apply for CNC. If you’re approved, it means the state comptroller agrees that you cannot pay your current tax debt.

While this means you’re temporarily off the hook from paying the debt, interest will continue accumulating. The state can also pay off your debt with future tax refunds you’d otherwise receive. CNC status doesn’t last forever; expect annual audits to determine whether you can repay your debt.

Installment agreements

If your federal tax bill is too high to pay all at once, you may be able to set up a payment plan with the IRS. Similarly, some states may allow installment agreements—either short-term or long-term.

Repayment terms can vary by state, and no state guarantees approval (nor does the IRS). You may be more successful applying for an installment agreement if you work with a state tax relief service that can navigate the process.

Offer in Compromise (OIC)

Another tax debt relief tool is an offer in compromise (OIC), which is available with the IRS and some state governments. While difficult to get approved, an OIC lets you settle with the IRS or state government for a lower amount than you owe.

Innocent spouse relief

Like the federal government, some states offer innocent spouse relief. If you can prove your spouse made errors when filing taxes you had no control over and didn’t know about, you may qualify for tax relief.

Military relief

You might be able to suspend your tax debt payments if you serve in the military or enter a combat zone.

File for bankruptcy

You shouldn’t take filing for bankruptcy lightly, but it is useful for wiping out debt. For example, you may be able to suspend collection or even eliminate some of your tax debt.

Tip

Need more help? You can use our guide to state tax debt forgiveness to find a direct link to your state’s tax relief resources.

How do I start working with a company that offers state tax relief?

If any of the tax relief options above feel suitable for your situation, but you’re overwhelmed by the prospect of working with the IRS for federal tax debt relief and your state comptroller for state tax debt relief, it might be time to start working with a tax relief service. But how does it work?

Tax relief companies negotiate with federal and state tax agencies on your behalf and use the strategies above to postpone, reduce, or cancel your tax debt. To do so effectively, they’ll need information about your:

• Bank accounts
• Investment accounts
• Outstanding debts, including credit cards
• Assets such as your house and car
• Businesses, if you own any
• Employer and employment history
• Monthly living expenses

Essentially, these tax relief services need your full financial picture to fill out the necessary forms for various types of state tax relief.

Getting tax relief can take months, maybe even a year. It depends on the type of relief you’re applying for, but don’t expect the process to be fast.

You also shouldn’t expect the process to be free. On average, tax relief services cost $250 to $750 for the initial consultation (discovery and investigation). After you’ve paid for this initial service, tax relief companies will charge based on the type of tax relief you seek with the state. The table below shows the average costs for tax relief services.

Service	Average cost
Discovery/investigation	$250 – $750
Installment agreements	$1,500 – $5,000
Offer in compromise	$2,000 – $7,500
Currently not collectible	$1,500 – $4,000
Innocent spouse relief	$3,500 – $5,000
Penalty abatement	$250 – $1,000

Keep in mind that tax relief services cannot guarantee success. So you could spend thousands of dollars but not qualify for any tax relief. It’s a gamble—but working with tax pros can improve your chances of success because they know how to navigate the landscape and fill out the forms.

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Does IRS debt go away?

Is paying for state tax relief services worth it?

State tax relief services can be expensive, but they could be well worth the cost if you’re drowning in tax debt and facing severe penalties, wage garnishment, and property liens.

The best way to determine whether it’s worth it is to calculate your total state tax debt and compare it against the prices above. It could be worth the cost if you owe much more than tax relief companies charge for their services.

Meanwhile, take the time to educate yourself on the various tax relief options your state offers—and figure out what makes for a successful candidate:

• If your income is high enough and you regularly spend money on dining out, have a car payment for an expensive vehicle, pay for many streaming services, or pay for regular unnecessary expenses at the store, for instance, you’re less likely to win your case with the state government—and thus working with a state tax relief service may not be worth your time or money.
• But if you struggle from paycheck to paycheck and are working hard to improve your finances, the state government may be more likely to approve your tax debt relief application. Working with a tax relief service could be the right call in scenarios where you have a good approval shot.

State tax relief FAQ

Do states have tax relief programs?

Yes, states have tax relief programs designed to help taxpayers manage and resolve their state tax debts. These programs vary by state but often include options such as payment plans, offers in compromise, and penalty abatements. State tax authorities provide resources and support to help individuals and businesses navigate their tax obligations and seek relief when needed.

Are state tax relief services legitimate?

Yes, state tax relief services are legitimate when provided by reputable companies. These services involve professionals, such as enrolled agents, tax attorneys, and CPAs, who assist taxpayers in negotiating with state tax authorities to resolve outstanding tax debts. Choosing a trustworthy tax relief company with positive reviews and proper accreditations is essential to ensure you get legitimate and effective assistance.

Does state tax relief hurt your credit?

Generally, state tax relief itself does not hurt your credit. However, if you have tax liens, they may appear on your credit report and affect your credit score. Resolving your tax debt through a state tax relief program can help improve your financial situation and may prevent further negative impacts on your credit. It is important to address tax issues promptly to minimize potential credit damage.

How we selected the best state tax relief services

LendEDU evaluates tax relief companies to help readers find the best tax relief services. Our latest analysis reviewed 400 data points from 20 companies, with 20 data points collected from each. This information is gathered from company websites, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Recap of the best state tax relief companies