Mishandling your taxes can have dire consequences, especially if you need to catch up on your payments. The good news is that some professionals specialise in tax resolution and can assist you in overcoming your tax problems. Read on to find out what a tax IRS resolution is and the methods of effective tax resolution.
What is a Tax Resolution?
An outside tax IRS resolution firm can help you work out your tax debt with the Internal Revenue Service. The objective is to pay as little as possible in taxes. When someone has avoided paying back taxes to the IRS for a significant amount of time, they often find themselves needing tax resolution services. The IRS will contact your bank to file a tax lien or levy against your assets once they've had enough of waiting.
Methods for effective tax control
You are not alone if you owe the IRS money for unpaid taxes, interest, and penalties. Fortunately, there are tax experts available who have years of experience resolving tax issues and can guide you through this challenging time.
- Contract for Installments
Tax attorneys frequently use payment plans to settle client tax disputes. Rather than paying off the entire debt simultaneously, the taxpayer makes 72 equal payments throughout the payment plan. After receiving full payment, the IRS will release the federal tax lien.
- Payment Plan with Partial Payments
A partial payment instalment agreement is structured in the same way as a regular one. The key difference is that you only have to pay back your tax debt once the statute of limitations expires, typically 10 years. The result is a significant decrease in your regular payments. Unfortunately, the IRS will be reviewing your tax returns every two years. It is up to the IRS to decide whether or not to increase your payments if they determine that your income has increased significantly. Suppose your circumstances do not improve, and you still have an outstanding income tax liability when the statute of limitations expires. In that case, you will no longer be responsible for paying that debt.
- Not Collectible at present
Currently, Not Collectable is a powerful tool for resolving tax issues. The IRS will no longer try to collect any outstanding debt while you are in this status. The IRS resolution will look at the national minimum wage and cost of living standards to determine eligibility for this classification. They will stop trying to collect the debt if they verify that your costs have legitimately outpaced your earnings.
- Compromise Offer
Freelancers and entrepreneurs who made more money than expected the previous year often face a hefty tax bill come April. An “offer in compromise” helps many of these people out. Through this programme, taxpayers can settle their tax liability in full by paying a reduced amount, such as the full unadjusted tax liability.
- Submit Forms
Filing your taxes often eliminates your tax debt. This is because the IRS charges interest and penalties for late filing of estimated taxes. Submitting penalty abatement is the most common tax resolution method in this situation, resulting in the cancellation of penalties and interest.
Conclusion
Despite its complexity, the IRS resolution process is essential for resolving tax issues and discrepancies. Individuals and businesses can save time and effort when dealing with the IRS if they can access the right resources, such as cutting-edge software. Adopting these tools shortens the path to resolution and gives users the assurance they need to deal with any tax issues.
