The U.S. Internal Revenue Service, also known as the IRS, is responsible for collecting federal taxes and ensuring compliance with tax laws. The IRS is responsible for collecting tax money, processing tax returns, and distributing tax refunds. In 2018, the IRS collected about 250 million tax forms and distributed nearly $400 billion in tax refunds.
Many people only think of IRS during tax season and wait to receive their tax refund. Sometimes the IRS will be visible at other times during the year, but exceptions exist. The IRS can take action if an individual or business believes they haven’t reported enough income, are underpaid, and didn’t file the required returns. In these cases, an individual or company may require tax resolution services to solve the problem, pay back taxes and receive tax relief.
What is Tax Resolution?
Tax resolution means working with the IRS tax professionals to resolve your tax problems. You might have a tax problem or a tax situation that the IRS cannot solve. If your tax situation is complicated, the IRS could audit you to ensure you properly report income and claim the right deductions. The IRS might suspect you have under-reported income in certain circumstances and may want to look into your tax situation.
Another problem with the IRS is when you don’t file your taxes yearly. The IRS may charge you more for your tax owed if you don’t file your taxes in time.
Here are some examples of when you might want to use tax resolution services:
Don’t be alarmed if you receive an IRS notice that your tax returns will be reviewed. Although it may seem daunting, you don’t have to go through the entire audit process on your feet.
The IRS audits taxpayers for various reasons. But just because the IRS is auditing you doesn’t mean you did anything wrong. It is possible to rest easy by having a professional audit consultant prepare a defense for your audit.
The IRS also makes mistakes. Sometimes, the IRS thinks you made more money than your income, or it includes income from an ex or former business partner alongside your income. When this happens, the IRS has the right to challenge your opinion and present evidence to support your case. The tax professionals can help you prepare a Transcript Protest so you don’t owe any money.
What happens when the IRS amount you owe is too high that you can no longer repay it? In this situation, you don’t have a choice. You can choose to pay the IRS or keep your roof up.
The IRS can provide some relief for tax debtors who are unable or unwilling to pay. The IRS won’t collect your tax debt during a “currently not collectible” status. Tax resolution services are available to help you assess your eligibility and understand this status’s potential drawbacks and advantages.
When taxpayers or businesses do not pay their taxes on time, or if they pay in full, the IRS can charge interest and tax penalties. The IRS can waive some penalties in certain circumstances. You can have your tax resolution company help you determine if it is available to you and guide you through determining if you are eligible.
It is expected that you file a tax return every year. But, it may not be possible in all cases. An IRS representative might use that information to determine how much debt you owe. A tax consultant firm can help prepare your returns from the past. It can also help prepare your returns for the present and assist you in creating tax planning.
Getting Back Taxes
back taxes can be difficult to pay in one lump payment. To resolve tax issues, you must evaluate your returns and determine whether you are responsible. Working with the IRS to develop a plan can be part of tax resolution.
The IRS Is Compromising
There are occasions when the IRS is open to compromising with taxpayers. The IRS’ Offer in Compromise program can accept payments that are less than the amount you owe.
Negotiating with the IRS can be complicated, as they are not usually willing to make reductions in payments. Consulting a tax professional can help you decide if the IRS is willing to compromise or offer a better solution.
HTML3_ HTML5_ HTML6_ HTML7_ HTML8_ HTML7_
Payroll tax is required for businesses that employ workers. The IRS can penalize companies that fail to pay payroll taxes. Most commonly through the Trust Fund Receipt Penalty. A tax resolution professional will help you navigate the IRS’s penalty process.
HTML Tax Liens
A lien refers to a claim on a property, such as your home. If you have problems paying property taxes, taxes from the federal government, or taxes from the state, the tax agency could place a lien upon your home or other valuable property.
Any liens placed on a property should be removed and paid off to avoid foreclosure or other complications. Tax resolution can help protect your home from liens and verify that any outstanding liens have been removed.
Wage Garnishment Help
IRS will go to extreme lengths to get its money. One of these is to garnish your wages. This can make your paycheck smaller and/or non-existent. Negotiating with IRS about garnishing income is an important part of tax resolution. A tax consultant is the ability to help you to create a payment schedule to present to the IRS. This shows that you can make the payments without the IRS taking the money.
The sooner you get your tax problem resolved, the greater. Prompt tax resolution may save you headaches and stress. It will also mean that you won’t be paying more to the IRS.
What Can Tax Resolution Do for You?
You can work directly with the IRS to resolve your tax problems. However, it is usually best to get help from tax professionals.
You, as a taxpayer, have certain rights. These rights are listed in the IRS Taxpayer Bill of Rights.
You have the right to:
- Be informed
- Qualitative service
- You should not pay more than you owe
- Make the IRS listen by challenging it
- Appeal the IRS decision
- Retain representation
- A fair and just tax system
Working with a company that offers tax solutions will help to ensure that your rights and interests are protected. A tax resolution company can help you:
Evaluate Your Position
When working with a tax firm, the first thing to do is schedule a consultation. During this meeting, you will be able to talk about your particular problem and a tax professional who will review your paperwork and evaluate your situation.
Consultation can help you decide if you are a candidate for tax resolution. It allows the tax expert to get to know you better and help you find a solution.
If a tax professional or enrolled agent thinks your situation is possible, the next step is to devise a plan for you to work with the IRS to reach a satisfactory agreement. Enrolled agents will review all of your documents if you are being audited. They will then prepare a defense for your case.
Your tax consultant can prepare a repayment plan that will show the IRS how much you can afford to pay. The defence and plan you have can protect you from getting overwhelmed by many tax bills.
The Taxpayer Bill of Rights allows you to have representation. Your tax consultant can serve as a mediator and intermediary between you and the IRS. With a tax resolution firm, you don’t have the responsibility of dealing with the IRS alone.
An IRS tax consultant and an enrolled agent have many years of combined experience and a deep understanding of tax law. They are knowledgeable about your rights and what you can and cannot be held responsible for by the IRS. You will feel less stressed and have a better chance of achieving a favorable outcome.
How does tax relief work?
The IRS is a more compassionate and understanding agency than you might realize. The IRS offers several tax relief programs for eligible individuals and companies.
Fresh Start is one example of such a program. The IRS started the program in 2011 to help businesses and individuals who were having trouble paying their taxes. The initiative brought about three changes:
Liens Fresh Start: The IRS raised the dollar threshold on liens. It made it simpler to withdraw liens once taxes have been paid.
Installment agreement: Fresh Start enables taxpayers to collaborate with the IRS to establish an installment agreement to repay their tax debt. Because they can apply online and do not need to fill out any forms, it is easier for people with less than $50,000 in owed tax debt. Fresh Start also extended the repayment term to six years, from five.
Compromise Program: Fresh Start widened the offer in the compromise program. It now allows more people to apply. An Offer of Compromise is a way to settle with IRS and pay less than you owe. This tax relief solution is available after all other options have been exhausted. An Offer in Compromise is available for taxpayers with earnings up to $100,000 or tax liability up to $50,000.
You can apply on your own for tax relief. However, many people prefer to work alongside a tax professional to ensure they are properly going through the process and improve their chances of getting the relief they need. When you do decide to seek help regarding your tax situation, you should know that only certain people are qualified to represent or assist you. These are:
Certified public accountants
An IRS-authorized representative, an enrolled agent, can represent taxpayers. To become an Enrolled Agent, one must pass a 3 part exam or have a history of working with the IRS.
To become an enrolled agent, one must take continuing education classes and uphold a code. To get tax relief, an enrolled representative will ensure that you are working with someone knowledgeable and willing to work with you.
BC Tax Can Help You Resolve Your Tax Issues
BC Tax is committed to helping taxpayers reduce their taxes. We have built up a track record of success by working with many customers.
Our CPAs are enrolled agents who can help you review your situation, negotiate with the IRS to reduce or eliminate your tax liability, and assist you in filing tax returns. Our offices are located in Colorado. However, we serve taxpayers from all 50 states.
Each individual’s tax situation and results will differ. Contact BC Tax to learn more about your tax situation and how BC Tax might help.