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Trends Shaping the Tax and Debt Relief Industry in 2024

Falling behind on taxes or dealing with outstanding debt is a stressor that most Americans will deal with at some point in their lives. With the increased use of credit cards, less dependence on cash, and economic instability brought about by the COVID-19 pandemic, more and more individuals find themselves seeking help from tax and debt relief firms. The industry has seen quite a bit of change over the last few years. In this article, we outline five trends shaping the tax and debt relief industry and dive into what’s causing this growth and change.

1. Increased Debt and Tax Settlements

Overall, the number of debt settlements in the U.S. are rising. These increasing numbers point to an increasing need for debt relief companies nationwide. Total consumer debt in the U.S. is close to $4 trillion with more than 41 percent of all households burdened with some credit card debt.

The tax relief industry is also rapidly growing. According to the IRS, the year 2020 saw 128 billion dollars owed in back taxes. The numbers don’t lie. With stats like these, it’s certain that a growing number of consumers will look to tax and debt relief companies to help them manage payments in order to settle what they owe. 

2. Lasting Effects of COVID-19

The COVID-19 pandemic caused—and is still causing—a huge shift in the world’s economy. The long-term effects of the economic changes that have taken place are still to be seen, but one thing is for sure: individuals are feeling the impact. One in four adults in the U.S. reported that they or someone in their home lost their job due to the coronavirus outbreak. And even if they didn’t lose a job, countless others faced cut hours or reduced pay as the companies they worked for dealt with lost cash flow resulting from shutdowns and restrictions. Many are still struggling financially because of the ways the pandemic has altered how we spend money and what we spend it on.

This decrease in income across the board means individuals are left without the means to pay taxes or debts. The tax and debt relief industry will certainly see more people seeking options as their payments are due, but they are without the means to pay them. Tax and debt relief companies can stand in the gap and offer some relief for clients who still need time to recover losses they suffered due to the COVID-19 pandemic.

3. More Frequent Auditing

It’s not just individuals who are feeling the brunt of revenue loss caused by the pandemic. With less money being spent by consumers, government budgets are suffering. Revenue from taxes and fees on hotels, air travel, tolls on state highways, and even gasoline has sharply decreased. Consumption of these types of goods and services has plummeted, and it seems that state budgets will likely follow suit. State governments are on track to lose upwards of $167 billion.

When the economic health of our country is struggling to this degree, funding has to come from somewhere. We’re likely to see an increase in audits over the next few years. With an increase in auditing comes a higher likelihood that an individual—or business—is at risk for owing back taxes. If an audit covers several years, and a person owes years of taxes, they’ll almost certainly need to enlist the help of a tax relief service. 

4. Virtual Relief Services

If consumers are presented with the choice to make an appointment at an office or conduct a meeting virtually, most of the time, they will opt for the virtual option. This year alone, companies like Skype and Zoom have seen explosive growth in their user base. While many of these numbers might be attributed to lockdowns and healthcare concerns, the fact is that consumers and merchants alike have learned that almost all business can be conducted virtually.

The same is true for tax and debt relief services. These companies have the option to offer their services through phone or video conferencing, providing the same high-level relief that their customers require with the convenience they want. By providing a virtual option, relief agencies offer fast and convenient aid. Virtual relief services allow for an improved personal connection that a phone call or email doesn’t allow while simultaneously catering to their clients’ needs. Now that relief agencies have stepped into the arena of virtual consultations and meetings, there’s no turning back—and for good reason. Clients are more likely to seek out a relief agency if they’re able to receive debt relief services from the comfort and convenience of their own homes.

5. Tax and Debt Relief Financing

Relief agencies exist to help their clients overcome financial obstacles that might be difficult or seem impossible without aid. In fact, trying to DIY debt or back tax payments might actually backfire. If an individual has a history of issues with the IRS, there’s no room for error when filing taxes or filling out paperwork. That’s why it’s so important to have professional relief agents doing the work. Having help from experienced pros make paying debts or back taxes much less stressful. 

A good tax or debt resolution agency knows they must provide their clients with manageable payment options. Working with a financing company like United Consumer Financial Services benefits both the tax relief firm and its customers. Financing allows for customers to make scheduled, low monthly payments, instead of paying for relief services in one lump sum. This allows customers to utilize tax relief services and helps them resolve their debts without worrying about an inability to pay. With little, poor, or even no credit, customers can benefit from quick credit approval to get the help they need.

Resolution agencies also benefit from offering financing. Companies are able to serve a broader range of consumers while improving cash flow and sales numbers. And because financing companies like UCFS pay the tax relief firm directly, there’s no danger of clients defaulting on payments and disrupting profits and income. Financing programs enable relief agencies to offer a wide range of customers the best service while at the same time benefitting their own business. It’s a win-win for all parties!