Tax Debt Relief Guide: When and How to Hire Services, and the Top Companies to Choose

Tax debt relief is a type of program the federal government offers to those who can’t afford to pay what they owe. Depending on your situation, relief may come in the form of a payment plan, forbearance, penalty abatement, or debt settlement.

It’s possible to request tax debt relief on your own. However, it can make sense in certain circumstances to enlist the help of a tax debt relief company. Here’s what you need to know about how tax relief services work, when to consider asking for help, and the best companies to work with.

Top companies for tax debt relief services

The Internal Revenue Service (IRS) may offer you tax debt relief in the event you can’t pay your tax bill. You may have several options for getting out of tax debt while limiting your costs:

• Payment plan: The IRS offers short- and long-term payment plans.
• Currently not collectible status: If the IRS agrees that you can’t afford to pay your tax liability, it may offer a temporary forbearance until you can. 
• Offer in Compromise: In some cases, you may be able to settle your tax debt for less than you owe.
• Penalty abatement: If you’ve received a penalty from the IRS and meet certain criteria, you may qualify to have the penalty reduced or removed.

You can work with the IRS to evaluate your tax debt relief options and submit your request on your own. However, it may be wise to consult with a tax debt relief service in the following situations:

• Your tax situation is complex.
• You’ve failed to file or pay taxes for several years.
• You’re overwhelmed with the process.
• You don’t have enough time to manage your tax debt on your own.
• You’re willing to pay to have someone else communicate with the IRS on your behalf.

When choosing tax debt relief services, it’s important to research reputable companies. We’ll cover the specific factors to evaluate below, but to start your search, here are our recommendations for the best tax relief companies based on hours of research and evaluation.

Anthem Tax Services

Best Service Guarantee

4.9 _/5

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Why we picked it

Anthem Tax Services excels at providing tailored tax debt relief services with a focus on transparency and customer satisfaction. Its standout feature is a money-back guarantee, ensuring clients either save money or have their payments restructured—or they get their investment refunded. 

The company offers personalized tax relief strategies, including audit defense, tax settlement negotiation, and wage garnishment relief. Anthem’s availability in all 50 states and ability to handle both federal and state tax debt make it a comprehensive solution for a wide range of tax issues.

• Offers services like audit defense, tax settlement negotiation, and wage garnishment relief
• Money-back guarantee if it doesn’t save money or rework payments
• Transparent consultation process to outline potential costs upfront
• Nationwide availability for federal and state tax issues

• Minimum tax debt requirement of $10,000
• Initial fees starting at $500

Details

Free consultation?	✅
Availability	50 states
Minimum tax debt	$10,000
Tax types	Federal and state
Initial fee	$500

Larson Tax Relief

Best Initial Investigation

4.7 _/5

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Why we picked it

Larson Tax Relief is celebrated for its thorough investigative process and transparent approach. Its no-cost initial discovery phase allows clients to understand their situation without financial commitment, which sets it apart. 

Larson specializes in federal and state tax debt, offering services such as IRS installment agreements, penalty abatement, and tax lien resolution. With a 15-day money-back guarantee, clients can trust that they’ll receive value from its services. 

Larson’s nationwide availability and expertise in handling complex tax situations make it a strong choice for those with significant tax debt.

• Services include IRS installment agreements, penalty abatement, and tax lien resolution
• No upfront fees for initial discovery phase
• 15-day money-back guarantee
• Nationwide availability for federal and state tax issues

• Higher minimum tax debt requirement of $25,000
• No explicit financing options available

Details

Free consultation?	✅
Availability	50 states
Minimum tax debt	$25,000
Tax types	Federal and state
Initial fee	None; discovery is free

Alleviate Tax

Best Lowest Price Guarantee

4.7 _/5

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Why we picked it

Alleviate Tax provides affordable and customer-friendly tax debt relief with a focus on ensuring clients receive value for their money. Its unique lowest price guarantee helps it stand out, ensuring cost-effectiveness. Alleviate follows a structured two-phase process—starting with an evaluation to determine the best course of action before committing to full service. 

Its offerings include penalty abatement, tax settlement negotiation, and levy or garnishment release. The 30-day money-back guarantee and financing options make it accessible to a broader range of clients. With its emphasis on federal tax relief, Alleviate is a go-to option for those seeking a streamlined approach to resolving their tax debt.

• Offers penalty abatement, tax settlement negotiation, and levy/garnishment release
• Two-phase process minimizes upfront financial commitment
• 30-day money-back guarantee
• Lowest price guarantee and financing options available

• Limited to federal tax debt only
• Minimum tax debt requirement of $10,000

Details

Free consultation?	✅
Availability	50 states + Puerto Rico
Minimum tax debt	$10,000
Tax types	Federal only
Initial fee	$495

How do tax debt relief services work?

Tax debt relief services can help you evaluate your options and communicate with the IRS on your behalf. Most will start by requesting documentation of your situation to assess your circumstances, determine your chances of qualifying, and develop a personalized plan.

After the initial consultation, the company will then present the plan to you with a quote for its cost. Fees can range from $1,000 to $5,000 depending on your situation. It may be a flat fee, a percentage of what you owe, or an hourly rate. If you agree to move forward, the company will negotiate with the IRS on your behalf and keep you updated on the progress of your requests. 

While these services can ease the stress of managing tax debt, they also play a crucial role in ensuring you don’t inadvertently make costly mistakes. The IRS has strict guidelines, and simple errors—such as failing to file a return on time or misunderstanding penalty structures—can lead to significant penalties and delays. 

Working with an experienced tax relief company allows you to confidently navigate these complexities, ensuring all steps are handled correctly and efficiently.

I’ve seen individuals make a number of mistakes when owing the IRS: 

1. If you owe taxes and you can’t afford to pay, you still need to file your tax return. When you don’t file your return on time, the IRS automatically tacks on a 5% failure-to-file penalty for every month you owe taxes, up to a maximum of 25%. On top of that, you’ll also pay interest on the bill until you pay it in full. 
   
2. To provide extra time, requesting an extension gives you an additional six months to complete your return. If you file an extension request before the April tax deadline (the deadline for tax year 2024 is April 15, 2025), you won’t need to pay the failing to file a penalty. However, you’ll still owe a failure-to-pay penalty on any outstanding taxes, which comes to 0.5% of the balance per month. This penalty is also capped at 25%. 
   
3. If you owe taxes and you can’t pay, it’s wise to find out whether you qualify for an installment plan. If you fit certain criteria, you may be eligible to apply for a payment agreement online. Otherwise, you’ll need to fill out Form 9465 and mail it to your local IRS office to see what kind of plan you qualify for.
   
4. Finally, be careful how you pay the IRS. If you don’t have enough cash to cover your tax bill, you may explore different options to pay with a loan, such as a personal loan or a home equity loan or line of credit. A tax relief company might make sense in certain situations.

Are tax debt relief companies legitimate? 

Although many legitimate tax debt relief services exist, scammers may also seek to take advantage of struggling and desperate taxpayers. 

In particular, these scams tend to involve offers that are too good to be true, often with an exorbitant upfront fee. However, many never reach out to the IRS. They may even request the same documentation multiple times, only to let you know that you don’t qualify—and they don’t offer a refund.

To learn more about how to identify tax relief scams and avoid them, read our resource: Nine Tax Relief Scams to Avoid. 

How to hire a tax relief company

Choosing the right tax relief company can make a significant difference in how effectively your tax issues are resolved. The process involves more than just selecting a company; it’s about ensuring the provider is legitimate, transparent, and well-suited to your needs.

Using our recommendations above is a good place to start. Then follow these steps to make an informed choice:

• Search online for customer reviews through websites such as the Better Business Bureau and Trustpilot to gauge the company’s reputation and reliability. Look for patterns in feedback, particularly concerning hidden fees, communication, and success rates.
• Ask how the salespeople make money—most lawful companies don’t pay their salespeople commissions, which can incentivize misleading claims.
• Find out about the process the company uses to evaluate your situation. A legitimate tax relief company should thoroughly review your financial details before making any promises about resolving your debt.
• Ask about the company’s refund policy before paying any fees. A clear and fair refund policy is a good indicator of a trustworthy company.
• Trust your gut—anything that seems too good to be true most likely is. Beware of guarantees to eliminate your debt entirely or promises of specific results before reviewing your case.

We advise going through the initial free assessment with multiple providers to compare fees, strategies, and approaches. This allows you to identify a company that aligns with your needs and budget, minimizing the risk of falling victim to misleading claims.

Read More

Do Tax Relief Companies Really Work?

Other ways to get help with tax debt 

If your tax debt situation is relatively simple or you don’t want to pay for assistance, the following are ways to address your situation.

Work with the IRS directly

You can do anything a tax debt relief service can, and there’s no extra cost to work with the IRS. You can use the federal agency’s tax debt help page to learn more about your options and choose the path that makes the most sense to you.

Contact the Taxpayer Advocate Service

The Taxpayer Advocate Service is an independent organization within the IRS that can help you resolve tax issues that you can’t on your own. The organization can also help protect your legal rights as a taxpayer.

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Tip

Visit the Taxpayer Advocate Service website to learn more.

Reach out to your state’s tax agency

If you have state tax debt, search online for contact information and contact your state’s tax commission to learn more about your relief options.

Hire a tax attorney

In some situations, it can make sense to hire a tax attorney rather than a tax debt relief service. If the IRS is trying to collect money from you, it must halt efforts once you hire an attorney.

An attorney can represent you in U.S. tax court and even threaten to sue the federal government if it violates your rights. 

Read More

How to Find a Tax Attorney to Help With Tax Debt

Take out a loan

While the IRS offers payment plans, the federal agency charges interest and a penalty for failure to pay until you’ve paid your balance in full. If you want to avoid penalties, you might consider taking out a loan to pay your bill. Options may include:

• 0% interest credit card: For smaller debts, a credit card with an introductory 0% APR promotion may be worthwhile. These cards typically offer an interest-free promotion to new cardholders, which may last between 12 and 21 months. Just keep in mind that you’ll need to use a third-party service to pay with a credit card, and a transaction fee is involved.
• Personal loan: If you have great credit, you may qualify for a low interest rate on a personal loan. Take your time to shop around and compare the best personal loans based on interest rates, repayment terms, and fees.
• Home equity loan or line of credit: If you own your home, you may be able to tap some of the equity in the form of a home equity loan or line of credit. Interest rates may be lower compared to personal loans, but nonpayment can result in foreclosure.

Before you take out any debt to pay off your tax liability, take your time to research and compare all available options to determine the best path forward.

FAQ

How can I get my tax debt forgiven?

The IRS offers several programs that may result in tax debt forgiveness, depending on your circumstances. One common option is the Offer in Compromise, which allows you to settle your tax debt for less than you owe if paying in full would cause significant financial hardship. 

To qualify, you must demonstrate that your income, expenses, and asset equity prevent you from paying the full amount. You can apply by submitting Form 656 and supporting financial documents to the IRS. Other options include penalty abatement and innocent spouse relief, depending on your situation.

How much will the IRS usually settle for?

The amount the IRS settles for varies greatly depending on your financial situation. Through the Offer in Compromise program, the IRS evaluates your ability to pay, income, expenses, and asset equity to calculate a reasonable settlement amount. 

Generally, settlements are a fraction of the original tax debt but are not guaranteed. The IRS uses a formula to determine the lowest amount it will accept, which typically considers your disposable income and the value of your assets.

Who qualifies for the IRS Fresh Start program?

The IRS Fresh Start program is designed to make it easier for taxpayers to pay off their tax debts and avoid liens. To qualify, you must meet certain criteria:

1. Installment agreements: You can qualify for extended payment plans if you owe $50,000 or less in combined tax, penalties, and interest and can pay the balance within six years.
2. Offer in Compromise: The Fresh Start initiative expanded eligibility for Offers in Compromise by adjusting income thresholds and expenses considered in the evaluation process.
3. Penalty relief: First-time penalty abatement may be available for taxpayers who have been compliant in prior years but are now struggling due to temporary setbacks.

Eligibility varies based on your income, expenses, and financial situation, so it’s best to review your options with a tax professional or relief company.

How we selected the top tax debt relief companies

LendEDU evaluates tax relief companies to help readers find the best tax relief services. Our latest analysis reviewed 420 data points from 21 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.