Tax Resolution Services
In the U.S., the Internal Revenue Service (IRS) is charged with collecting federal taxes and ensuring people comply with taxation laws. The IRS is responsible for processing tax returns, collecting tax funds, and disbursement of tax refunds. In 2018, the IRS processed more than 250 million returns of tax and gave tax refunds totaling more than $400 billion.
Many people think of the IRS when tax time approaches while waiting to receive an income tax return. There are occasions. However, there are times when the IRS is present at other times throughout the year. If the IRS believes that the business or individual isn’t reporting enough income, underpaid taxes, or did not file a return as they should, the agency can decide to take action. If this happens, the person or business may require tax resolution services to solve the problem and pay back taxes or seek tax relief.
What Is Tax Resolution?
Tax resolution collaborates with IRS and tax experts to resolve your tax-related issues. The IRS could have a problem regarding your return for tax or tax status due to various reasons. Suppose you’re dealing with a complex tax return. In that case, it is possible that the IRS could investigate your tax situation to make sure you’re reporting the correct amount of income and also claiming legitimate deductions. In certain instances, it is possible that the IRS may conclude that you’ve not properly reported your income and might decide to look closely at your situation about taxes. We will discuss more tax resolution services.
Another instance of an IRS issue is when you fail to file your taxes for several years. The issue may eventually be so serious that you require outside assistance to get back on track and avoid being penalized for more than what you owe to the IRS.
The most common reasons to utilize tax resolution services include:
IRS Audit
Audit Representation
If you get a notification from the IRS that you’re about to be subjected to an audit, don’t worry. While the auditing process may appear daunting, it’s not something you should do by yourself.
The IRS will indeed audit taxpayers for various reasons. Just that the IRS audits you determines that it will be auditing you does not necessarily mean that you did something wrong. Employing a tax expert to prepare an audit defense will ensure that the findings from the audit are as precise and fair as possible.
Transcript Protest
The IRS isn’t perfect, either. Sometimes, it thinks you earned more than you did or even includes the income of your ex-spouse or a former business associate along with your income. If this happens, you are entitled to dispute the IRS and provide evidence to prove your argument. Tax professionals can help create the transcript protest so that you don’t need to pay the amount you do not owe.
Uncollectible Debt
What happens if your remittance to the IRS is so large that you’re unable to repay the debt and can still pay reasonable living expenses? If that’s the case, there’s no need to choose between having a shelter or the IRS.
Since we are discussing tax resolution services, the IRS provides relief if you cannot pay a tax debt. When you’re in a “Currently Not Collectible” status which is a condition of the status, the IRS isn’t going to try to collect the debt you have to pay. Tax resolution services can assist you in determining if you’re eligible for this status and will help you understand the benefits and drawbacks of making use of the status.
Tax Penalties
The IRS generally charges tax penalties and interest when businesses or individuals pay taxes late or fail to pay. There are, however, some circumstances in which the IRS can waive the penalty. Tax resolution firms can assist you in determining whether you are qualified for tax penalty abatement and guide you through determining whether you’re eligible for the tax penalty waiver.
Unfiled Returns
You’re required to file your tax return every year; however, life or other circumstances might hinder you from filing in certain circumstances. If that’s the case, the IRS may guess the amount you owe on the documents it’s been given, for example, Forms 1099 and W-2. A tax consultant firm can assist you in preparing taxes from previous years. They can also assist you in completing your present-day tax returns and work with you to create an income tax strategy to plan for the future.
Paying Back Taxes
If you have back taxes to pay and you are unable to pay back the tax, you may not be in a position to pay the entire sum due as a lump amount. Tax resolution can involve reviewing your tax returns to ensure that you’re responsible for the tax back you’re assessing. It could also involve collaboration with the IRS to create an arrangement to make paying back the tax easier to manage.
Compromising With The IRS
There are instances where the IRS is willing to negotiate with taxpayers. If you’re in debt for a significant amount and you aren’t able to pay it in full, the IRS offers in the Compromise program may accept a payment lower than the amount you are owed.
Negotiating with the IRS isn’t easy because the IRS usually will not consider requests for reductions in payment amounts. Consulting a tax professional will help you determine whether negotiating with the IRS can help you solve the tax problem or if an alternative such as an installment plan may be better.
Payroll Tax
Payroll Tax Recovery
Companies with employees have to pay a payroll tax on wages earned by their employees. If a company fails to pay taxes on payroll and is not paying them, the IRS may penalize it, typically via an administrative penalty known as Trust Fund Recovery Penalty. Tax resolution professionals can assist you through the procedure when the IRS can impose a penalty, which includes working with you on completing Form 4180 and helping you prepare for the interview.
Tax Liens
The term “lien” refers to a legal claim against the property you own, like your home. If you’re having trouble paying your property and federal and state taxes, the tax authority may place a lien against your home or another valuable property.
All liens attached to a property should be properly removed and disbursed to avoid foreclosure or other problems. Tax resolution is a way to safeguard your home from liens and also verify that the liens have been properly dismissed or removed.
Wage Garnishment Help
If the IRS is looking for money, it’ll go to certain lengths to collect it. One of those includes garnishing your earnings and making your earnings smaller or not even there. A significant part of tax resolution is engaging with the IRS before it starts to garnish your earnings. A tax professional can assist you with putting up a payment plan that you can submit to the IRS and show that you can pay the amount you owe without having to collect the funds directly.
The earlier your tax problem is addressed, the more effective. A professional tax resolution could result in less stress and headache for you and ensure you don’t have to pay more than you have to pay the IRS.
How Does Tax Resolution Help You?
While you choose to resolve your tax issues with the IRS by yourself, It’s usually beneficial to seek out tax experts who can assist you in working with the IRS to resolve your tax issues.
As taxpayers, you have certain rights. These rights are described within the IRS Taxpayer Bill of Rights. You are entitled to:
Be aware
Get top-quality service
You should pay only what you have to
Contest your IRS for a hearing
Finality
Privacy
Refusal of the IRS’s decision IRS
Retain representation
Confidentiality
Fair and fair
A company offering tax resolution services can help you ensure your rights are safeguarded. A tax resolution company can assist:
Evaluate Your Situation
The first step in working with a tax solution company is setting up a meeting. At the consultation time, you’ll have the opportunity to discuss your specific issue. The tax professional will be able to review the paperwork you submitted and evaluate the situation.
Consultation with a tax consultant can help determine if you could be able to benefit from the services provided by a tax solution company. The consultation also allows the tax expert to learn about the situation in greater detail and determine an answer to your concern.
Put Together A Defense
If a tax professional or an enrolled agent thinks your situation could be solved, The following step would be to develop an action plan that will allow you to cooperate with IRS and reach an agreement that pleases all. If you’re under audit or enrolled, an agent will review your tax documents to ensure they fully understand your circumstance before creating a defense.
Suppose you are bargaining to negotiate with IRS or to avoid wage garnishment. In that case, Your tax advisor will be able to put together a repayment plan that proves to your IRS that you can pay — or are unable to pay in certain instances. Your strategy and defense could protect you from being flooded by a large tax bill.
