Individuals and businesses with a past-due tax obligation or back taxes due may be facing some pretty stiff penalties. There are measures like garnishments, levies, and liens that the IRS can take to begin to collect the taxes forcefully they are owed or to pressure the individual or business organization into paying or settling the outstanding debt. In some cases, this is where they turn to a reputable tax resolution service to help them clear up the debt, arrange or reduce monthly payments, and even begin to repair their credit after IRS action negatively impacts it.
Many people don’t know just how much a tax resolution service can help them, though, so they never look further into it. However, working with a reputable tax resolution service can yield incredible benefits and a significant reduction in stress and worry inflicted on the party that owes the debt. Here are some tips on how to best utilize a tax resolution service.
Filing Missing Tax Returns
If your tax debt is due to having failed to file for one or more years, getting the missing year’s financial information and filing the missing returns can be incredibly frustrating and even confusing for many individuals. This task only gets more complicated and vital with businesses or other taxable organizations.
A tax resolution service can help you or your business perform crucial historical bookkeeping tasks that ensure your tax returns for the missing years are filed correctly. Making sure the information on the missing tax returns is correct is one of the most important factors since incorrect or incomplete information can cause additional audits or penalties.
Arranging For Partial Payment Installment Agreement
There are situations where the debt that the individual or business owes is getting close to being excluded via the statute of limitations. In cases like these, since the tax resolution service will act as your representative when communicating with the IRS, they can act as your negotiator and negotiate a partial payment installment agreement.
This means that not only will you be able to break up your tax debt into payments, but you may not have to pay your entire debt. In addition, since the statute of limitations may be about to expire, sometimes they will convince the IRS to accept a reduction in the total amount owed. Sometimes this can be modest, and sometimes it can be monumental.
Negotiate An Offer In Compromise
Sometimes, an installation agreement will still cause significant financial hardship to the debtor. In situations like this, your tax resolution representative may be able to work with the IRS to negotiate an offer in compromise. This is a tentative offer from the IRS to allow the taxpayer to settle and accept the tax debt less than the original debt amount.
This will generally require that the taxpayer prove that they cannot pay the total amount owed. This is usually only accepted when the IRS is convinced that giving the taxpayer this concession will help promote future compliance and payment. These offers will only remain valid as long as the taxpayer keeps up their end of the agreement. Otherwise, the IRS will reinstate all previous penalties, fines, and balances owed.
Lowering Monthly Payments
If you are eligible for an installment agreement that will clear up your debt with monthly or quarterly payments, one of the most powerful ways to utilize a tax resolution service is to have them negotiate a lower payment for you. This is usually done by proving that the established or offered payment will cause you undue economic hardship.
Not only can this be a compelling way for individuals to improve their tax debt, but it can be highly effective for small businesses as well. Small business owners with tax debt may be forced to choose between keeping the doors open for business, keeping payroll going, or paying their installment payments. A tax resolution service can help lower that payment, relieving the business owner of choosing between paying their tax debt and keeping their business open.
Utilizing A Tax Resolution Service
Nearly any individual or taxable organization can reap significant benefits from effectively utilizing a tax resolution service. For individuals, their penalty and garnishment relief can help just as much as having them negotiate a lower installment payment. For businesses, not only can they prevent levies and liens, but they can help the organization save countless thousands in fines and penalties.
