Possible Tax Resolution Strategies to Set Your Mind at Ease
Even for honest taxpayers, the IRS can be extremely frightening. Unlike most other government agencies, the IRS has unbridled power to attach your wages, freeze your bank account and even confiscate your property, which is enough to send a chill up the spine of any taxpayer.
If you receive a letter from the IRS saying that you owe additional taxes, it is important not to panic. It may be a frightening situation, but there are things you can do to settle your tax debt and get back on the good side of the IRS.
Taxpayers have options when resolving tax disputes and paying additional taxes due, and simply knowing what those options are can put your mind at ease.
As an expert Tax Resolution Firm, we encourage all readers facing a tax problem, whether the feds or the state, to contact us for a free consultation.
Here are three strategies you can use to resolve your tax debt and get on with the rest of your life. Of course, not all of these options will be right for everyone, but it is vital to be an informed taxpayer.
1. Review the Amount Owed And Your Tax Return In Question
If the IRS says you owe money, you should not simply assume they are right. The tax agency does make mistakes (a lot), as do tax preparers and ordinary taxpayers.
Whether you filed your taxes on your own or hired someone else to do it for you, it is important to examine your return and compare what you find with what the IRS claims. It pays to seek professional help for this tax review, even if you initially filed your own taxes. A professional with IRS experience may be able to uncover errors and inconsistencies you would have missed on your own, which could save you money.
There is no guarantee this review will eliminate the extra taxes the IRS says you owe, but it never hurts to be sure. There have been many cases in which taxpayers who thought they owed money to the IRS ended up owing nothing – or even being due a refund from the IRS.
Set Up a Payment Plan
Getting a notice of additional tax due from the IRS is frightening, especially if you cannot afford to pay what the agency says you owe. Keep in mind, however, that you do not necessarily have to pay the bill all at once.
The IRS is often willing to set up payment plans with taxpayers, making paying what you owe easier and less stressful. However, once again, it is a good idea to seek professional help and guidance here – the IRS can drive a hard bargain, and you do not want to end up with a payment plan you cannot afford and wind up defaulting on it.
If you fall behind on the payment plan you agreed to, you could be subject to additional enforcement action, including the tax agency garnering your paycheck or seizing funds from your bank accounts. Getting the help of a tax resolution professional upfront can help you avoid these severe consequences.
Explore an Offer in Compromise Settlement
If you are genuinely unable to pay the money the IRS claims you owe, you may be able to work out a (much) smaller lump sum payment. The IRS may not advertise this program, but they are often willing to work with taxpayers by accepting lesser amounts, especially if those taxpayers have little in the way of equity in assets and a limited income. Sometimes these settlements can be for a fraction of what’s owed if you qualify. Again, we offer a free no-obligation consultation to determine if you are eligible.
If you plan to explore this last option, it is critical that you work with a tax resolution expert. An offer in compromise can be extremely complicated, with legalese and language that can be difficult to understand. You do not want to make a misstep here. You want to ensure that you only pay the lowest amount allowed by law in settling your tax bill.
Few things are as frightening as getting a letter from the IRS. That official-looking letterhead is terrible enough, but what the letter says is even worse. If you receive such a letter, you must take positive steps immediately. Ignoring the situation will make it worse, and it won’t go away. The sooner you explore your tax resolution options, the better off you will be.
If you want the help of an expert tax resolution professional who knows how to navigate the IRS maze, reach out to our firm, and we’ll schedule a no-obligation confidential consultation to explain all your options to resolve your tax problem permanently.