Tax problems create anxiety and a wish to bury your head in the sand, hoping everything will disappear. You don’t have to feel that way. You have many options to resolve your tax issues and solve any tax problem you might have.
From paying off your tax debt in installments to delaying collection or paying less than you owe, you can get out from under the IRS spotlight. Keep reading to learn how.
What Is Tax Resolution?
Tax resolution means evaluating your tax situation and putting together a defense against anything Uncle Sam throws at you. Hiring someone to help places a buffer between you and the IRS, easing some of the tension that comes with tax problems.
The sooner you engage assistance, the better off you are. If the IRS believes you or your business haven't reported enough income, underpaid your taxes, or didn't file a return, it takes action. You may be audited. The IRS may place liens and levies against your property or wages. If the problem goes on too long, the agency can even seize your property.
If you are doing something illegal, like tax evasion or fraud, the IRS can commence criminal proceedings.
If you have tax problems, seek help before they grow too big. Here's how to get started.
Get Current and Compliant
The first step in solving any tax problem is to get current on all your tax filings. If your primary concern is that you haven't filed one or more returns, get them filed. The IRS charges a penalty for failure to file, so you should file a return every year even if you can’t pay in full.
The next step is to settle your back taxes. The IRS charges penalties for failure to pay, and your tax debt also accumulates interest until your taxes are completely paid. Penalties and interest make your tax burden continue to grow until you take care of it.
Settling your back taxes doesn’t necessarily mean paying the entire debt at once. You have other options that can make paying the federal government more affordable if still unpalatable.
How to Resolve Tax Problems
As we mentioned above, the IRS has several methods to get their money or "encourage" you to pay your tax debt.
Stop Wage Garnishment
The IRS can garnish your wages, which is a form of levy. The IRS files a wage garnishment with your employer, requiring them to withhold additional funds from your paycheck to send to the IRS. Wage garnishment creates more work for the employer and is definitely not a good look for you.
Working with the IRS to establish a payment plan can stop the wage garnishment.
Remove Tax Liens
The IRS has another tool in the box called a tax lien. The agency places a lien against your personal property or real estate to force you to pay taxes. With the lien in place, you cannot sell the property, and it can be difficult to refinance your mortgage or get any other type of loan.
If you don't pay, the IRS eventually seizes your property and sells it to pay taxes plus the seizure and sale.
The Fresh Start Program increased the threshold for liens and made it easier for a lien to be withdrawn after taxes are paid. It also allows lien withdrawal once a taxpayer enters into a direct payment agreement, so you don’t have to pay the entire amount to get out from under the lien.
Appeal Tax Levies
Besides placing liens against your property, the IRS can levy your bank accounts. The bank must enforce the levy. However, you should receive plenty of notice before the levy begins. You have time to contest or appeal the notice to prevent the levy.
If the levy has already begun, you can get it released before the funds are removed.
Pay Your Taxes
If you owe more than you can pay all at once, you can enroll in a payment plan. Once you set up a qualified payment plan with monthly installments, the IRS often releases liens and removes other obstacles from your financial picture.
Depending on how much you owe, you can choose between a short-term and long-term payment plan. The IRS accepts many forms of payment, including debit and credit cards, money orders, checks, and direct debit from your account.
To have a lien released, you may be required to use direct debit. Otherwise, a tax professional can help you put together a payment plan you can afford using the best payment method for your needs.
What if you know you can never pay off your entire tax debt? It isn’t easy to do, but you can go to the IRS with an Offer in Compromise. You offer to pay a portion of your tax debt. If the IRS accepts, you don’t have to pay the rest.
If you can’t pay at all right now while maintaining a reasonable standard of living, you can apply for Currently Not Collectible. The IRS abates your taxes until you can pay. So, if you lost your job or became unable to work temporarily, you can file for a CNC.
Innocent Spouse Relief
Whether or not you are divorced, you can be shielded from their tax problems if you file taxes separately from your spouse. If you have an ex in the picture who made some poor tax choices, you aren’t on the hook for them.
Most taxpayers need expert advice to make it through an audit. Not everyone who receives an audit notice has a tax problem; the IRS does have randomly selected tax returns for audit. Other times, you may have made an error, or something else triggers an audit.
Top Tax Defenders can help you prepare and work through the audit. Many audits are done through the mail, but if you must speak with a revenue agent, having someone with you who understands tax law is of great benefit.
Customized Tax Planning
Once you have your tax debt settled or have a plan to pay it off, a tax resolution service provider can help you plan better for the future. When you start a new business or have a significant life change, you should consider any ramifications to your tax profile.
Criminal Tax Defense
If you have committed fraud or tax evasion, you should get an experienced tax attorney on your side. These are serious crimes with severe penalties, and you need a lawyer who knows the ins and outs of tax law.
Tax resolution services cover a wide array of tax circumstances, even if you don't have tax problems. If you are facing issues with the IRS, there are experts who can help you untangle the mess and get you back on track.
Contact Top Tax Defenders today to start tackling your tax problems.