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Tax resolution services are a broad subject area that covers everything a business or individual may need to address outstanding tax debts owed to the IRS. Deciding when to hire a tax service is one of the toughest decisions facing anyone who has had to face off with the IRS about unpaid taxes. However, the sooner you hire a professional and begin working on the issue, the more likely you are to come to a favorable resolution.
Most people wait until they are in trouble with the IRS before hiring a tax professional to help them resolve the issue. If you have already received notice from the IRS that you owe unpaid taxes, fees, or penalties, now is the time to seek out a professional who can help identify the severity of the issue and work toward a solution. The longer you wait, the higher your penalties are likely to be, and the more you will end up paying in the end.
After You've Received Notice
The best time to hire a tax professional to handle your back taxes is at the first sign of trouble. By law, the IRS must provide you with written notice that you are in default, and they must give you time to appeal or contest the amount owed. Hiring a professional at this point will allow them to look over your taxes and assess whether or not the tax bill is accurate.
At this stage, it may be possible to negotiate the amount due, form a payment plan, or contest the accuracy of the bill based on your tax returns as long as your tax professional has the full scope of the problem and you have not ignored the IRS's requests to address the issue.
If you have allowed a tax bill to linger too long, the IRS may choose to place a lien on your property or place a levy against your bank account, essentially demanding payment out of whatever assets you currently have. It is much harder to negotiate a settlement at this point. This is because the IRS is under the impression that you are unwilling to work with them and they have to use force to get what is owed.
A tax professional may still be able to help you resolve the issue at this point by re-opening lines of communication with the IRS and renegotiating a payment plan. It is important to note that if you have reached this point, you are unlikely to avoid the full weight of the tax bill, but you can work to reduce your monthly repayments to make the situation more comfortable until you are caught up.
The number one reason that individuals and businesses run into large tax bills from the IRS has to do with the failure to file returns for several years. If you have filed your returns every year, a tax professional can easily comb through them and determine if there was inaccurate reporting or other amendments that need to be made.
In the event that you failed to file taxes for a number of years, you will need a professional to go back through your books and recreate the tax returns that should have been filed in those years. At this point, the late returns can be filed and penalties paid for failure to meet your deadlines. Recreation of historical tax documents is a difficult and time-intensive task that most people cannot complete without the help of an expert.
Nevertheless, in order to come to a final resolution, your tax advocate will need to know exactly what should have been owed in those years and any penalties or late fees due for not filing on time. Only after these returns have been filed and all outstanding bills are paid will you be considered current and compliant with the tax code.
As mentioned above, the type of solutions available to you will depend greatly on how long you have let the bill sit without addressing it. If you are still in the early stages of dealing with the IRS, you are more likely to find leniency and options when it comes to settling the bill or creating a repayment plan.
In many cases, an installment plan to repay the balance is the only option available. The amount of your monthly installment will be based upon the amount you owe and how much the IRS has determined that you can repay. A tax professional can play a big role in helping lower this amount to a comfortable level so that you can continue living your life comfortably or keep your business open while still meeting your current tax obligations.
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One of the most common ways that a tax professional can assist with your outstanding liabilities is to have some or all of your penalties removed. This can be done when you are able to show that you had reasonable and just cause for not filing your tax returns. Again, this is easier to prove if you have made good faith efforts to work with the IRS in the interim and have not ignored their efforts to reach an agreement with you.
Every tax situation is unique, so the number of penalties that can be removed will depend on the total amount owed, the length of time it was left unpaid, and whether the penalties were assessed by the state or federal tax entity.
If you feel that the installment plan will put you in a place of financial hardship, you will have to prove that you cannot make the payments. Your tax professional will know what kind of documentation you need to make your case and how to bring it to the IRS for further consideration, but this is typically not something you want to attempt on your own.
While it is less common, the IRS also has a process for forgiving old tax debts. This is called an Offer in Compromise, where they forgive some or all of the previous debt owed in exchange for your commitment to remain in compliance for the following five years. The amount of the compromise can vary but is intended to help you get a fresh start.
Compromise is only granted in extreme cases where an installment agreement cannot be reached without causing further hardship, and it is imperative that you follow the guidelines of the offer precisely to remain in compliance. If you fail to hold up your end of the compromise, you could end up back in hot water with the IRS, owing all of the old debt plus your new taxes and penalties.
If you are facing daunting bills for unpaid taxes, now is the time to contact a professional and work toward a solution. The longer you wait, the harder it will be to get out from under your liabilities. Tax Alliance offers a number of tax resolution services to help you get caught up and stay in compliance going forward. To learn more, visit Tax Alliance online today.
Because of advancements in our technology, we are able to communicate with the IRS electronically, its as if we are in the same office! Faster service and more cost effective!
If you are not happy with our tax services within the initial 21 days, we will give you a 100% refund of services rendered, no questions asked!
You find it, we will match it! Tax Alliance will match and beat (by 10%) any competitive offer. Contact our office today and receive a free no obligation tax consultation.
Because of advancements in our technology, we are able to communicate with the IRS electronically, its as if we are in the same office! Faster service and more cost effective!
If you are not happy with our tax services within the initial 21 days, we will give you a 100% refund of services rendered, no questions asked! We help our clients nationwide!
You find it, we will match it! Tax Alliance will match and beat (by 10%) any competitive offer. Contact our office today and receive a free no obligation tax consultation.
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