Tax resolution — it sounds like something you make before a new year only for taxes, doesn’t it? Actually, tax resolution services are what you need if you have to resolve an issue with the IRS.
The federal government gets uptight when it discovers someone has not paid their fair share or taken deductions that don’t belong to them. (Too bad they aren’t as upset when the boot is on the other foot, but that’s another post...)
Anyway, if the IRS believes you, as an individual or as a business owner, haven’t reported enough income, have underpaid your taxes, or didn’t file a return when you should have, the agency takes some sort of action.
That action typically results in you, as a taxpayer, undergoing tax resolution to resolve any issues, pay your back taxes, or receive tax relief. (It happens!)
Tax resolution is the process of working with a tax professional and the IRS to find an answer to your tax problems.
When Do You Need Tax Resolution Services?
There are several times you might seek some professional help when the IRS comes calling. Some of the reasons the IRS turns its Sauron eye on you include:
- You have a complicated tax return, and they want to make sure that everything is correct
- You haven’t filed any taxes for several years
- You owe penalties
- You are a victim of tax identity theft
- You underreported your income
- You took credits or deductions you are not qualified to take
Notice that it isn’t always your fault. However, you could still use an advocate when straightening anything out with the IRS.
During tax resolution, tax professionals help you work with the IRS to resolve your issue. Also, they protect your rights as a taxpayer while helping you plan your defense. Tax resolution services include:
- Transcript protests
- Audit representation
- Payroll tax recovery
- Tax lien removal
- Uncollectible debt issues
- Tax penalty negotiations
- Unfiled returns
- Back tax resolution
- Wage garnishment help
- Compromising with the IRS
Dealing with the IRS on your own may not be in your best interests. Hiring someone who understands the ins and outs of tax law to speak for you and help you fix your problems is a better use of your resources.
Your Rights as a Taxpayer
The IRS has a Taxpayer Bill of Rights. Your rights include:
- Being informed
- Receiving quality service
- Paying as much as you owe and no more
- Challenging the IRS and being heard
- Appealing the decision of the IRS
- Retaining representation
- A fair and just tax system
Since one of your rights is retaining representation, you should definitely take advantage of it. Professionals you can hire to help included enrolled agents, CPAs, and tax attorneys.
The Steps to Resolving a Tax Problem
Step 1: Understand the Problem
Your first step is to define the problem. Request transcripts and information from the IRS and review the supporting documentation and tax returns from prior years. You can speak directly with an IRS representative about any specifics on your record, but you might want to hire someone to do that for you.
Step 2: Get Your Stuff Together
Put together your complete tax history to review. You may find you have more than one issue to resolve, including multiple unfiled returns or a collection agreement that could prevent you from receiving a penalty abatement.
On the plus side, you might find additional deductions. If you find errors, you must file an amended return as soon as possible.
Step 3: Get Yourself in Good Standing with the IRS
Make sure you are compliant with all filing and payment requirements. File any back tax years that ensure you maintain or recover your good standing. In general, you need to be current on the past six years of returns but confirm that with your tax professional and the IRS to see if you have to do anything more.
Once you have it figured out, adjust your withholding, or start calculating and paying estimated quarterly taxes.
Be sure to follow all IRS procedures and best practices to fix any problem or respond to IRS requests such as mail audit notifications.
Step 4: Check for Penalty Relief
In certain circumstances, you may be eligible for penalty relief or abatement. If you have no previous problems with the IRS, you might be eligible for a first-time penalty abatement for failure to file and failure to pay penalties.
Another reason you might qualify for relief is for hardship or circumstances outside your control. (Think hurricanes, tornadoes, and earthquakes.) But you have to ask. The IRS won’t automatically hand a penalty abatement to you.
Step 5: Confirm Issue Resolution
Just because you put a resolution into place doesn’t mean the IRS has followed it through. For example, you may have signed up for an installment payment agreement with direct withdrawal from your bank account. Then you find out the IRS didn’t link your bank account to your installment agreement.
Review every piece of mail you get from the IRS to ensure all is well. If you are still receiving notifications about something you thought was fixed, look into it immediately and ask for professional assistance.
Step 6: Use a Tax Professional When Things Get Complicated
Do you have a complicated tax return? You are better off hiring assistance than trying to DIY a complex return with multiple forms and other documentation.
Step 7: Use the IRS Appeals Process for Any Dispute
Remember, you have a right to appeal any decision from the IRS. If you think they have made the wrong decision, you can have them look again. The IRS does occasionally make mistakes.
Hire someone to help you review all IRS decisions as early in the process as possible. A professional can be your mediator and advocate for you for your rights.
How Top Tax Defenders Can Help
Top Tax Defenders is ready to help you review any tax issue and form a plan to resolve it. If you owe back taxes, have received an audit notification, or have any dealings with the IRS, call us.
We have insider knowledge of how the IRS works. We understand the bureaucracy and red tape in ways most people never will. We can help you figure out if you do owe the IRS anything and set up the appropriate repayment to reduce penalties and interest. We can sit by your side during audits to protect your rights.
We know how difficult it can be to face IRS debts but you can be sure that our highly experienced tax specialists will fight the IRS on your behalf.