Did you know that the total tax debt owed by Americans is $527 billion? The average tax debt owed to the IRS is $16,849. One of the biggest reasons that people owe taxes is because of unfiled tax returns.
Owing tax debt is stressful and can take a toll on your emotional and mental health. Before you pull out your wallet, you want to make sure that you do your due diligence. Tax resolution services can work with you to negotiate with the IRS on your behalf and resolve your tax issues.
Are you concerned about IRS errors or tax debts? Keep on reading to learn how tax resolution services can benefit you.
1. Audit Support
The IRS has certain algorithms and risk assessment factors that they use to determine whether someone should be audited. For example, if your current tax return is significantly different from the previous year, the IRS will consider it a red flag and require supporting documentation. You may also be subject to an IRS audit based on the luck of the draw.
An IRS tax audit is not common but involves a lot of work including providing supporting evidence and having ongoing discussions with the IRS auditor. What documents and support you need to provide in an IRS audit will depend on the specific circumstances and can be time-consuming. A company tax resolution service can help you through the entire audit process from tax planning to tax resolution.
2. Currently Not Collectible
Financial troubles can affect us at any time. The IRS understands this and can place your account as “currently not collectible” (CNC) if you can show that you can’t pay both your tax debt and your basic living expenses. Once your status is changed to CNC, the IRS will not try to collect from you.
A tax resolution service company can help you get CNC status or offer other solutions to manage your tax debts, including installment payments. Remember that you will still be racking up interest and penalties for the amount of taxes that you owe even if you don’t have to pay them yet.
3. Innocent Spouse Relief
If you filed your tax return jointly with your spouse, you may not even be aware of what was on the tax return that you filed if your partner takes care of all the finances. Unfortunately, you will be responsible for the full tax payment jointly and severally. This means that even if your portion is 10%, the IRS can come after you for the full amount.
Following a separation or a divorce, you don’t want to be held responsible for the full tax amount owed. With the help of resolution tax services, you can file for innocent spouse relief and only be responsible for your portion of the taxes. There are specific rules that must be met that a qualified tax professional can guide you through.
4. Levy Release
Another tax issue that you may run into is where you owe a tax debt, and the IRS puts a levy on your assets. If you don’t pay your tax debt, the federal government can seize your property. This levy can cause issues when you need to sell your property or get a loan.
A tax resolution specialist can work with you to put a stop to the levy and allow you to keep your assets. They can work on removing the levy and finding other ways to settle with the IRS including a payment plan.
5. Unfiled Tax Returns
Fear of taxes and the IRS is a real phobia officially named “Forosophobia”. This fear leads to procrastination, anxiety, helplessness, and avoidant behavior. If the fear of taxes caused you not to file your tax returns, a tax resolution company can help file your tax returns on your behalf.
Unfiled tax returns can increase the amount of your tax debt that you owe to the IRS. You will also have to pay penalties and interest for not filing on time. Something as simple as filing correctly can reduce the amount of money you owe drastically.
6. Reducing Penalties
High penalties are one of the most common tax issues you will run into including penalties for late filing tax returns and unpaid balances. The more time passes, the higher your penalties are. You can even have penalties that are higher than your tax debt.
Negotiating with the IRS to reduce your penalties can get complex and time-consuming. You will need to show different circumstances like financial hardship or honest errors and the IRS can waive the penalty fully or partially. A tax resolution company can help you with these discussions to ensure you get the best chance at reducing your penalties.
7. Back Tax Settlement
The audit could uncover errors on your part when you prepared the tax forms. The errors could also be IRS errors. In either case, you can contact a qualified professional to set out your strategy, assumptions, and interpretation of the tax laws for the IRS on your behalf.
After negotiations, they can help you settle your back taxes for less than what you currently owe. It depends on a number of different factors but understanding the complexity and nuances of the tax laws is the first step. A partial settlement of your total tax liability can make a huge difference in your financial and emotional health.
Get Help With Tax Resolution Services
Understanding the complexities of taxes is challenging. You want to make sure you have the best support on your side to provide tax resolution services for your company. Whether you are dealing with a tax debt or need additional audit support, working with qualified professionals can take away your stress and even save you money in the long term.
Book a free tax strategy session with us today. We will analyze your situation and can get the best estimate for you in as little as 45 minutes. We have the right experience and network to provide you with the best tax resolution services.