Everything You Need to Know About Tax Resolution
Tax Resolution is a service intended to help taxpayers through the confused errand of settling back tax issues. Taxpayers will in general look for help once they’ve disregarded the issue so long that the IRS or state has become alert and chosen to persuasively recoup unpaid taxes. This can appear as a tax lien on your property or a bank levy.
Effective Tax Resolution Methods
If you are in over your head in back taxes, interest, and penalties due to the IRS, you are not alone. Fortunately, there are experienced tax professionals who have years of experience with tax resolution to help you successfully through this trying time. Today, we will highlight the most effective methods of resolving income tax debt with the IRS.
The most common methods are:
– Installment Agreement
– Partial Pay Installment Agreement
– Currently not Collectible
– Offer in Compromise
Always File Returns
Frequently, the vast majority of your tax debt can be wiped clean if you file your taxes. This is because the IRS imposes interest and fines on estimated taxes if you fail to file. However, if you made fewer than $12,001 in 2018, you do not need to file. If you made $12,001 or more, you will owe penalties and interest if you did not file your taxes. The most common tax resolution method to have penalties and interest written off in this circumstance is submitting penalty abatement.
Communicating with the Taxing Authority
When the IRS or state first make contact, they will often inform the taxpayer what is owed and ask them to repay the liability. Recognizing that most taxpayers with outstanding tax debt don’t have the ability to repay their debt all at once, the IRS and states typically offer taxpayers a few resolution options. But in order to qualify for anything other than full payment of the tax debt, a taxpayer must be current and compliant.
Benefits of a Tax Resolution
There are several benefits associated with attempting to negotiate a tax resolution.
Pay Less Now – The most evident is that the taxpayer eventually pays an impressively lower measure of cash to the tax authority. Accepting that the circumstance of the candidate meets certain capabilities, a tax resolution sum might be resolved and introduced inside a brief timeframe. When the equalization paid depends on a common understanding, the record is viewed as settled-in-full, implying that the taxpayer is not, at this point subject to late expenses and different kinds of penalties that would be brought about otherwise.
Avoid Liens and Garnishments – Another advantage of a tax resolution is that the taxpayer maintains a strategic distance from the position of tax liens on a home or business, a bank demand on at least one accessible record, or the execution of a pay garnishment on their check.
To Wrap It All Up
Regardless of whether you get a major tax bill rather than the normal discount or owe a great many dollars in back taxes from a review, dealing with the IRS is unpleasant. The longing to hand that errand off to a specialist is certainly understandable, and by and large, it is the best move you could make.