Determine the best tax resolution system for you with this comprehensive step-by-step guide on clearing tax obligations.
Tax Issues with IRS | Complete Guide on Tax Resolution
Tax Resolution Definition: It’s the process of determining a system or solution that will help taxpayers resolve any tax issues they have with the IRS.
Step 1: Assess the Situation
It’s easy to panic when the IRS is breathing down your neck over certain tax issues. Before calling that tax resolution services provider on television, make sure to assess your situation first.
While it may be logical to seek IRS tax help from professional, you have to know not to take everything at face value. That ad you saw on television saying they can save you pennies on a dollar might not actually be true.
Some companies even guarantee to cut your tax obligations by more than 50%. You need to know how to differentiate between legit, certified firms and sleazy scams that rob innocent taxpayers.
The only way to do that is to first familiarize yourself with your tax status, outstanding balance, and issues that need tax resolution.
Step 2: Contact the IRS
Before calling that tax debt resolution expert, make sure to call the IRS. Contrary to popular belief, the IRS isn’t your enemy.
In fact, they just want to ensure that the citizens are fulfilling their tax obligations. There’s really no need to fear talking to them over the phone.
You can inquire about your tax status and ask them to expound on your outstanding obligations. It’s important that you get a clearer idea of what you need to do to achieve tax resolution.
You can contact the IRS at (800) 829-1040. A customer service representative will talk to you about individual tax return preparation and why you received a letter notifying you of any outstanding tax obligations.
Step 3: Negotiate with the IRS
Depending on your tax health, the IRS may work with you to help you look at options to wipe out your outstanding tax obligations and penalties. An individual can increase the chances of the IRS cooperating with them by bringing the current year up to date.
This means before you try to reach out for help from the IRS, do everything you can first to lessen any remaining tax debt. At the same time, fix any paperwork regarding your proof of income.
If the IRS sees that you are generally a good taxpayer, they may understand your situation and cooperate with you to reach an arrangement. Taxpayers who successfully reach an arrangement may avoid any additional fees they would’ve paid to a tax resolution specialist.
Step 4: Try Applying for a Payment Program
Tax resolution is about finding a way to wipe out your debt gradually in the most convenient way possible. If you can get an IRS payment program that suits your specific needs and allows you to wipe out your debt, then you should take it.
There are various payment programs for taxpayers to choose from. However, not everyone qualifies for all these programs.
With that in mind, the next thing you need to do after contacting the IRS is inquiring which installment options you can apply for. Depending on the circumstances, taxpayers can break down their existing debt to small, year-long monthly payments.
Of course, taxpayers should explore the different short- and long-term IRS payment plans before inquiring about them. If you already have a payment plan, make sure to check your outstanding balance and payment history through your tax account.
IRS Payment Plan Definition: An IRS payment plan is a system that allows taxpayers to pay off their existing debt through an arrangement that suits their needs. You’ll still have to pay the penalties and interest rates but it’ll be much easier to clear them since the IRS will break it down into several payments.
Step 5: File Your Tax Returns
The penalties on not filing tax returns are much larger than delayed tax payments. Of course, taxpayers should file and pay taxes on time, but if you don’t have the cash, at least file your tax returns.
Apart from avoiding unnecessary penalties, this will also help give the IRS a good impression of you. They may understand that you are a good taxpayer and financial troubles simply happen.
While this does not excuse you from your tax obligations, the IRS will be more likely to work with you to reach an arrangement. Your goal should be to reach a plan that benefits all parties involved, not just yourself.
Remember that they’re not here to make your life harder. Rather, they just want to ensure that you are performing your civil/state duty as mandated by law.
Step 6: Make the Necessary Changes
At this point, you should already know if you have to make any changes on the tax returns you previously filed. Make sure to fulfill all of these obligations to make the tax resolution process much easier.
Clarify with the IRS customer service representative any missing or incorrect information you need to attend to. These small but significant details have a large impact on your overall tax health.
Step 7: Contact a Specialist
Once you’ve had a clearer idea of how to achieve tax resolution, it’ll be much easier to decide whether you need the help of a tax specialist or not. What’s important is you know what to expect from your tax resolution expert.
Unless you have a small debt which you can pay off quickly, consulting with a tax specialist should generally be the protocol. This is especially helpful for people that the IRS won’t cooperate with anymore.
Also, make sure to tell your tax specialist everything they need to know. Be upfront with your details and do not attempt to hide anything from them.
If they don’t know the full story, then not even the best tax specialist in the country can help you achieve tax resolution. Make sure to prepare all the paperwork and documents they need to go over.
Overall, when it comes to tax resolution, it’s important for taxpayers to know exactly what their status is. It may not be the best decision to blindly trust a specialist to resolve any pending tax obligations.
Of course, the best way to avoid the hassle of contacting the IRS for tax resolution is to file your returns and pay your taxes on time. There won’t be a need for you to contact the IRS if there weren’t any issues, to begin with.
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