In our 30 year history, we've had many calls from businesses that owe payroll taxes. These clients often get into touch with us via our blog since we've posted frequently about 941 tax resolution and particularly the "cold calling of tax liens" phenomenon.
As anyone who owes 941 taxes knows, the filing of a tax lien will prompt phone calls from telemarketers based largely in Colorado. While the legality of the calls is questionable, it's worthwhile to examine what these tax relief companies charge. Let's look at a recent case example.
At the end of September 2016, we heard from a consultancy in Virginia that owed about $100,000 in unpaid 941 payroll taxes. This debt was large enough to trigger a tax lien and calls from cold calling tax relief firms.
- One company, a reputable one in Oregon, charged $10,000 to represent them.
- Another firm in Southern California, offered to take on her case for a $20,000 fee.
- We took on the case for $2,750 from start to finish.
What kind of outcome would this client expect?
$50,000 of her debt was for 940 taxes (annual taxes), returns the IRS had filed for her. These were easy to fix. Replacing the returns the IRS filed for them should reduce these to about $5,000.
Finally the other $50,000 in quarterly 941's looked fairly easy to deal with as well. This customer was looking to dissolve her business. We would direct the IRS to focus on the "Trust Fund" amount of the taxes (40% of the debt), bringing the debt down to about $20,000. This is possible when a business is looking to close.
The client should see their debt go from $100k to $25k with our help. We thought $2,750 was an appropriate value for our time. We even explained to the client our strategy up-front. The other firms were vague and just pressed the fear buttons in the client to get their bigger fees.