Are tax relief firms on the level?

Not always. Most of the time you come out the about the same or worse using one. Do you owe taxes? Do you owe back taxes? Have you not filed your taxes in 10 years? etc. If you are careful & diligent, you can usually cut a deal with the IRS & not need one of those services. There are some facts the IRS hides really well. They do not always win in court. They are not all powerful. They will work with you. I would advise going in with a some sort of recording device & meeting with an IRS representative, and see what they offer you. Tracking you down, arresting you, trying you, then fining you costs money, & the IRS is not ignorant of that fact. From what I was told, the difference between using a tax relief firm & negotiating on your own is about the same. Many times the firm will charge you money to get the same deal the IRS would offer you anyway, and you come our worse. You pay the firm to negotiate what you, possibly, could have negotiated yourself. I have known some businessman that had the IRS come to them and offer a "deal" for less money than what was owed. One farmer took the IRS to court and argued they were willing to negotiate, for less, it indicated that he did not owe them. His whole argument was either I owe you X amount, or I don't & if you are willing to take less it must mean I don't. The IRS's reputation kind of shot them down, but back then they did not have all these tax relief firms. He actually won, but I would not advise trying it. SO the IRS has been cutting deals since before they had these firms advertising on TV. We did not even have TV back then! I would call around and get some facts from the tax relief firms, take some notes, do not commit to anything. Then, go see what the IRS says. Tax relief firms won't deal with you until you owe a lot of money, they take a percentage of what they saved you, and or fees. The IRS has a genuine interest in writing off that debt, getting you back on track paying your taxes annually again & not having to pay people to handle your case anymore. Just tell them you cannot pay that much, & how broke you are & see where it goes. If it is not what you can deal with you can try the firm, but usually they won't do much better, & they charge you for it. Debt consolidation is also usually a scam too. Maybe 1 in 50 people get that really great deal like on the TV ad. Your deal may suck, and you owe the IRS & the firm in the end.

The Offer in Compromise depends completely on your financial ability to pay the tax debt and not on who prepares it. If you have equity in assets or a good income stream then you are very unlikely to reduce your debt provided that the tax assessed is correct.

Your best option to lower the debt is to hire someone to look at the tax years in question to make sure that the taxes, penalties, and interest have been calculated correctly. If you are comfortable that the assessment is accurate then the only way the IRS will "cut you a deal" is if you clearly have no ability to pay them.

Most of the claims these companies make are false because they cannot be 100% sure they can help you. Every situation is different.

Some could be and then others could be rip off firms so just be very careful when you are considering using any one of them for that purpose.

Hope that you find the above enclosed information useful. 04/15/2014

Most of them are scams.

The only way the IRS forgives debt is through the "Offer in Compromise" system. Paying an attorney to file an OIC application on your behalf doesn't improve your chances of having it accepted.

If you think you have ANY chance of qualifying for an OIC then maybe its worth it to pay a reasonable consulting fee to an experienced tax attorney or an enrolled agent for advice on how to improve your odds of being accepted, but if they demand thousands of dollars up front, its a scam.

good ones very likely are able to get your tax bill reduced but the money you pay them could better be used to pay down your debt and you can file your own Offer in Compromise for free

They don't do anything for you that you cannot do yourself.