The IRS has many tasks, from collecting taxes to ensuring taxpayers’ behavior in accordance with the tax laws. But the IRS can also cause major issues if taxpayers have tax debt. They can seize assets, enforce wage garnishment, as well as put companies out of business. And it is not always done on purpose – sometimes these issues can arise out of an error by the IRS.
That’s why it’s in every taxpayer’s interest to seek tax resolution services. By doing so, they can avoid complications and reduce their tax debt. The first step towards tax relief is asking the question, “What are tax resolution services?”
What is Tax Resolution?
Simply put, tax resolution is where you work with the IRS and tax professionals to resolve your tax problems. This could involve unpaid back taxes, penalties incurred, or confirmation that you reported the right amount on your tax return.
It is highly recommended that taxpayers hire an experienced tax professional to fully understand their tax liability and the overall situation. Consulting a licensed tax specialist, such as TPI Group, will take some of the burden off of your shoulders.
How Much do Tax Resolution Services Cost?
When you come in for an initial consultation, we will discuss and review your tax history and ask questions about your situation. Depending on the complexity of your situation, tax resolution services can cost from a thousand dollars to tens of thousands of dollars. However, resolving the issue will save you from further debt and trouble with the IRS in the long run, which ultimately saves you money.
There are many tax resolution options available, and your tax specialist will provide you with the appropriate one.
Do Tax Resolution Services Really Work?
Tax resolutions services do work because tax relief companies, such as TPI Group, use different strategies to lower your tax debt. This often involves negotiations with the IRS and assistance with audits.
Here are some common tax relief solutions you can expect when working with a tax professional:
When paying off your tax debt in full isn’t possible, taxpayers can opt for monthly payments, provided the IRS agrees. Oftentimes, they will agree since an installment plan means they will eventually receive the money owed to them. An installment plan can provide tax relief since it will help you to avoid wage garnishment and other penalties.
There are two types of installment plans:
- Informal: A taxpayer promises to make regular payments in a mutually agreed upon amount that will resolve the tax debt within two years. There is no written agreement.
- Formal: A written agreement is made between the IRS and the taxpayer where the latter promises to pay down their debt with monthly payments that are set at a specific amount.
A tax specialist will ensure that you can pay the monthly amount. If not, they will negotiate with the IRS.
Penalty Abatement or Adjustment
When taxpayers have penalties and interest—usually due to late payments or filing tax returns past the deadline—the tax debt is significant. Penalty abatement can help to remove the assessed tax liability. A penalty adjustment modifies the tax liability.
This type of tax relief strategy can be used only if there is reasonable cause for the abatement or adjustment. Reasonable cause comes in many forms, including:
- An error by the IRS
- The mailing address is wrong
- There was a death or illness in the family
The IRS will usually provide an adjustment or removal of up to one-third of your tax amount. Form 843, Claim for Refund and Request for Abatement must be filled out.
Remember: Whether it’s for penalties and interest or another matter, tax resolution is easier when working with a tax professional.
Offer of Compliance: How Do I Get My IRS Taxes Forgiven?
In the case where a taxpayer cannot afford to pay the lowest installment agreement, an offer in compromise can be a solution. To resolve your personal or business taxes, an offer in compromise is a settlement made between the IRS and the taxpayer with the intent to settle any unpaid taxes. The agreed-upon amount will be lower than the full amount owed.
Both parties are aware that the taxpayer cannot pay the taxes, which can mean enforcement of payment will cause more harm than good for both the IRS and the taxpayer. Therefore, the taxes are forgiven with the condition that the taxpayer remains current and compliant for the following five years. Failure to do so means that the taxpayer will be held liable for payment of the taxes.
Lien Relief & Release
The IRS can issue a lien to claim their legal right over a taxpayer’s assets as security when they have not paid their debt. If the taxpayer does not manage to pay off their debt or work with a tax specialist, the IRS can eventually seize the assets to resolve the debt. Essentially, the IRS makes a lien so that other creditors are aware that the IRS are legally within their rights to the taxpayer’s assets.
There are several ways the IRS will release the lien:
- The tax debt has been paid.
- The statute of limitations for the collection of the debt expired.
- The debt was discharged in bankruptcy.
- The tax debt becomes legally unenforceable.
The IRS will release the lien 30 days after one of the aforementioned scenarios occurs.
Whether you need to resolve your tax debt with an installment agreement, an offer in compromise, or another way, make sure to contact TPI Group to help you work with the IRS.
How Can TPI Help?
TPI Group provides tax relief by handling your tax problems with an audit or other tax resolution services. Our experienced tax professionals have a hotline that gives us direct access to IRS-enrolled agents. We can resolve many tax problems right over the phone, and avoid the paperwork, as well as the months-long wait for a response from the IRS.
Come see us during tax season or throughout the rest of the year, so we can handle your tax problems and devise a strategy for a brighter future.
Contact us today!