Dealing with the IRS can be a daunting experience, even for honest taxpayers. Unlike other government agencies, the IRS has unrestricted power to garnish your wages, levy your bank account and even seize your property. This is enough to cause fear and anxiety among taxpayers. However, do not fear as there are different resolution strategies for your IRS problem.
Receiving a letter from the IRS stating that you owe additional taxes can be concerning. However, it is important to stay calm. There are options available to help resolve the tax debt and get back in compliance with the IRS. Simply being aware of what these options are can put your mind at ease.
Tax Resolution Strategies to Set Your Mind at Ease
Here are three tax resolution strategies we recommend you take to resolve your tax debt and get on with the rest of your life. Note, though, that not all these options are right for everyone. However, it’s essential to know what they are so you can make the best choice.
1. Examine the Amount Due and the Tax Return in Question
When the IRS informs you that you owe money, it’s important not to automatically assume that they are correct. The tax agency, tax preparers, and taxpayers alike can make mistakes. Therefore, it’s in your best interest to review the amount owed and the tax return in question to ensure accuracy.
Regardless of whether you filed it on your own or hired someone to do it for you, it is crucial to review your tax return and compare it with the IRS’s claims. Even if you initially filed your taxes, it’s beneficial to seek professional help in this process. A tax professional with experience dealing with the IRS can potentially identify errors and inconsistencies that you may have missed, which could save you money.
While there is no guarantee that reviewing your tax return will eliminate additional taxes owed, it’s always worth double-checking. There have been instances where taxpayers who believed they owed money to the IRS ended up owing nothing or were even entitled to a refund from the IRS.
2. Establish a Payment Plan
Receiving a notice from the IRS for additional taxes can be frightening. This is particularly true if you cannot pay the amount they claim you owe in full. However, it’s important to remember that you do not have to pay the entire bill at once.
The IRS is usually open to working out payment arrangements with taxpayers, which can make paying your taxes more manageable and less stressful. It’s a good idea to seek professional help and guidance when setting up a payment plan, as the IRS can be tough negotiators, and you don’t want to end up with a plan you can’t afford and default on.
If you fall behind on the agreed payment plan, you could be subject to further enforcement actions like wage garnishments or bank account levies. Consulting a tax resolution professional beforehand can help you avoid these severe consequences.
3. Consider an Offer in Compromise Settlement
If you are unable to pay the total amount of taxes the IRS claims you owe, you may be able to negotiate a reduced lump sum payment through an Offer in Compromise. This option may not be widely advertised, but the IRS may be willing to accept a lesser amount, particularly for taxpayers with limited assets and income. This can sometimes result in a settlement for a fraction of what is owed.
This can be a complicated process, so it’s important to work with a tax resolution expert to ensure you are paying the lowest legal amount possible and avoid making any mistakes during the process.
We Can Develop a Tax Solution Plan for You
If you’re struggling with a tax issue and have received a letter from the IRS, don’t panic. However, it is crucial to address the situation promptly and not ignore it. The problem will only get worse if nothing is done about it. As a professional Tax Resolution Firm, we encourage you to contact us for a free and confidential consultation. We can assist in curating a tax resolution strategy tailored to your specific needs and circumstances. Don’t let a tax problem weigh you down; let us help you find a solution.