When Should You Consider Using Tax Resolution Services?

Tax resolution services are a broad subject area that covers everything a business or individual may need to address outstanding tax debts owed to the IRS. Deciding when to hire a tax service is one of the toughest decisions facing anyone who has had to face off with the IRS about unpaid taxes. However, the sooner you hire a professional and begin working on the issue, the more likely you are to come to a favorable resolution.

Do You Need Tax Resolution Services?

Most people wait until they are in trouble with the IRS before hiring a tax professional to help them resolve the issue. If you have already received notice from the IRS that you owe unpaid taxes, fees, or penalties, now is the time to seek out a professional who can help identify the severity of the issue and work toward a solution. The longer you wait, the higher your penalties are likely to be, and the more you will end up paying in the end.

After You've Received Notice

The best time to hire a tax professional to handle your back taxes is at the first sign of trouble. By law, the IRS must provide you with written notice that you are in default, and they must give you time to appeal or contest the amount owed. Hiring a professional at this point will allow them to look over your taxes and assess whether or not the tax bill is accurate.

At this stage, it may be possible to negotiate the amount due, form a payment plan, or contest the accuracy of the bill based on your tax returns as long as your tax professional has the full scope of the problem and you have not ignored the IRS's requests to address the issue.

If a Lien or Levy Is Pending

If you have allowed a tax bill to linger too long, the IRS may choose to place a lien on your property or place a levy against your bank account, essentially demanding payment out of whatever assets you currently have. It is much harder to negotiate a settlement at this point. This is because the IRS is under the impression that you are unwilling to work with them and they have to use force to get what is owed.

A tax professional may still be able to help you resolve the issue at this point by re-opening lines of communication with the IRS and renegotiating a payment plan. It is important to note that if you have reached this point, you are unlikely to avoid the full weight of the tax bill, but you can work to reduce your monthly repayments to make the situation more comfortable until you are caught up.

Understanding the Scope of Your Tax Liability

The number one reason that individuals and businesses run into large tax bills from the IRS has to do with the failure to file returns for several years. If you have filed your returns every year, a tax professional can easily comb through them and determine if there was inaccurate reporting or other amendments that need to be made.

When You Haven't Filed

In the event that you failed to file taxes for a number of years, you will need a professional to go back through your books and recreate the tax returns that should have been filed in those years. At this point, the late returns can be filed and penalties paid for failure to meet your deadlines. Recreation of historical tax documents is a difficult and time-intensive task that most people cannot complete without the help of an expert.

Nevertheless, in order to come to a final resolution, your tax advocate will need to know exactly what should have been owed in those years and any penalties or late fees due for not filing on time. Only after these returns have been filed and all outstanding bills are paid will you be considered current and compliant with the tax code.

What Kind of Resolutions Are Available?

As mentioned above, the type of solutions available to you will depend greatly on how long you have let the bill sit without addressing it. If you are still in the early stages of dealing with the IRS, you are more likely to find leniency and options when it comes to settling the bill or creating a repayment plan.

In many cases, an installment plan to repay the balance is the only option available. The amount of your monthly installment will be based upon the amount you owe and how much the IRS has determined that you can repay. A tax professional can play a big role in helping lower this amount to a comfortable level so that you can continue living your life comfortably or keep your business open while still meeting your current tax obligations.


Reduced Penalties

One of the most common ways that a tax professional can assist with your outstanding liabilities is to have some or all of your penalties removed. This can be done when you are able to show that you had reasonable and just cause for not filing your tax returns. Again, this is easier to prove if you have made good faith efforts to work with the IRS in the interim and have not ignored their efforts to reach an agreement with you.

Every tax situation is unique, so the number of penalties that can be removed will depend on the total amount owed, the length of time it was left unpaid, and whether the penalties were assessed by the state or federal tax entity.

If You Can't Afford Your Payments

If you feel that the installment plan will put you in a place of financial hardship, you will have to prove that you cannot make the payments. Your tax professional will know what kind of documentation you need to make your case and how to bring it to the IRS for further consideration, but this is typically not something you want to attempt on your own.

Reaching Compromise

While it is less common, the IRS also has a process for forgiving old tax debts. This is called an Offer in Compromise, where they forgive some or all of the previous debt owed in exchange for your commitment to remain in compliance for the following five years. The amount of the compromise can vary but is intended to help you get a fresh start.

Compromise is only granted in extreme cases where an installment agreement cannot be reached without causing further hardship, and it is imperative that you follow the guidelines of the offer precisely to remain in compliance. If you fail to hold up your end of the compromise, you could end up back in hot water with the IRS, owing all of the old debt plus your new taxes and penalties.

If you are facing daunting bills for unpaid taxes, now is the time to contact a professional and work toward a solution. The longer you wait, the harder it will be to get out from under your liabilities. Tax Alliance offers a number of tax resolution services to help you get caught up and stay in compliance going forward. To learn more, visit Tax Alliance online today.

More Blogs

Nervous About Tax Season? Work With Experienced Tax Consultants!

When you trust a Tax Alliance professional to handle your taxes, they'll conduct any necessary communication with the IRS. In addition, they have advanced automation technology that enables them to contact the IRS as quickly as if they shared an office. You know how critical this feature is if you've ever found yourself on hold while calling the IRS. When dealing with your finances, you want to promptly handle any questions or issues without waiting for the next available representative.
Read More...

Do You Need Tax Relief?

Due to job loss, the increasing cost of living, and issues related to the Coronavirus pandemic, millions of Americans currently have trouble paying their taxes. While the IRS is strict and believes that almost everyone should pay the full amount, there are various forms of tax relief available to citizens. By working with a good tax consultant, you can find out whether you qualify for the forgiveness program and if so, which option is the most suitable.
Read More...

7 Things to Know About Payroll Taxes

As soon as you notice that you can't pay, you should take action. The IRS has designed a comprehensive forgiveness program, which can lighten your tax burden or allow you to spread out your payments over several years. Let's have a closer look at what payroll tax is and what you can do if you can't pay your debt.
Read More...

7 Signs You Need Help Dealing With Your Back Taxes

In the past year, millions of Americans haven't filed or paid their taxes on time. While some have simply forgotten the deadline, others are struggling to pay due to a lack of funds or a bad business year. Fortunately, there are specialists who can provide tax help to anyone who is facing an IRS audit, is at risk of a lien, believes their taxes are unfair, or who doesn't have the money to pay their back taxes.
Read More...

8 Tax Relief Options That Actually Work

Being saddled with major tax burdens is no fun, and as we've all learned, there is absolutely no way to avoid taxes. There are, however, ways to reduce tax liability so the final bill isn't so overwhelming. Some of these apply to general tax filing and how taxpayer liability is calculated, while others apply to situations in which back taxes are owed. Here we look at a number of effective tax relief options that apply to both scenarios.
Read More...

When Should You Consider Using Tax Resolution Services?

The best time to hire a tax professional to handle your back taxes is at the first sign of trouble. By law, the IRS must provide you with written notice that you are in default, and they must give you time to appeal or contest the amount owed. Hiring a professional at this point will allow them to look over your taxes and assess whether or not the tax bill is accurate.
Read More...

8 Reasons to Work With a Consultant for Tax Resolution

If you haven't filed tax returns for many years, you may be worried about legal repercussions. A tax consultant will alleviate your worry by investigating your situation and helping you determine what steps you should take. This could involve seeking past employment information to enable filing tax returns for the years in question, but this isn't necessarily always the case.
Read More...

Are Your Wages Being Garnished? Start the Tax Resolution Process Today

Are Your Wages Being Garnished? Start the Tax Resolution Process Today
Read More...

How Do IRS Tax Liens Work?

A tax lien is a legal claim the government has to your property. They will place it on your home, bank account, or other assets when you have failed to pay off the tax you owe for an extended period of time. You will receive such a lien after the IRS has determined what you owe them and sent you a bill for it. If you don't come up with the amount in a timely manner or you refuse to pay, the government is legally allowed to garnish your wages or your property.
Read More...

How Can You Avoid or Stop an IRS Bank Levy?

Tax debt is a very common problem in America at the moment, and it's trickier than many other kinds of financial issues. You can't simply have it written off during a bankruptcy because many types of tax debt are considered essential, just like alimony and child support. One of the ways the IRS can collect the outstanding amount is an IRS bank levy. Fortunately, tax resolution services can help you to stop such a process and regain control.
Read More...

How Do You Qualify for an "Offer in Compromise"?

In general, the IRS expects taxpayers to come up with the full amount they owe, and they believe that most people are able to pay this. Nevertheless, they recognize that there are certain special circumstances that should be taken into consideration. If you genuinely can't pay your debt without having to struggle financially, the IRS may offer a compromise and allow you to pay less than the original amount.
Read More...

How Does IRS Tax Resolution Work?

With something like wage garnishments hanging in the balance, owing the IRS money can be a huge deal and a difficult financial burden to bear. However, IRS tax resolution is actually easier than many people believe. When you work with seasoned tax experts, you can resolve your tax debt easily.
Read More...

How Far Back Can the IRS Audit You?

Dealing with the IRS because you made a mistake on your tax return or you haven't paid your taxes is a stressful process, and it's almost always best to hire tax resolution professionals to help you out. If you are worried about how you filed your taxes this year, you might be wondering about the auditing process. How far back can the IRS audit you? Fortunately, there is a time limit, and in most cases, an audit happens in the same year you filed your return.
Read More...

How Does a Tax Audit Work?

It can be very stressful when the IRS lets you know that you are being audited. Although this doesn't always mean that there is an issue, there's a good chance that you owe the IRS and will have to pay penalties and back taxes. The best way to stay on top of the situation is to get in touch with a great tax resolution company that can help you to resolve the situation. Let's have a look at what happens when you get audited.
Read More...

How Long Does an IRS Audit Take?

Every year, a proportion of the population is chosen for IRS tax auditing. If you've received a notification that you have to undergo such an audit, you might be worried about the process and how it will affect your life in the next months. But how long does an IRS audit take, and what can you expect from the process? In today's article, we will go over the different factors that affect your audit and its duration.
Read More...

What Is the Penalty for Late Taxes?

Late taxes are always bad news, whether it's late to file or late to pay. If you don't file by the tax filing deadline, you might be looking at a penalty. This penalty is usually higher than the penalty you can get from not paying your taxes on time, so even if you aren't able to pay your owed taxes by the due date, you should absolutely still file on time.
Read More...

Biden Administration intends to enhance IRS enforcement against high earners and corporations

A significant focus on tax compliance and follow-up enforcement actions might be on the horizon. We previously reported that the Internal Revenue Service (IRS) Cyber Crimes Unit had indicated its determination to enhance enforcement activity connecting to income from cryptocurrencies. Those efforts are proceeding. However, if the Biden Administration has its way, cryptocurrency enforcement will simply be the tip of the iceberg when it pertains to enhanced tax enforcement.
Read More...

Biden Proposes Doubling IRS Workforce As Part of Plan to Snag Tax Cheats

President Joe Biden is proposing to double the size of the IRS, by hiring virtually 87,000 new workers over the following 10 years, as part of a sweeping strategy to chase down tax cheats. The hiring spree, part of a bid to enhance IRS funding by $80 billion, would be phased in to offer the department time to adjust, the Treasury Department said in a report Thursday.
Read More...

Payroll Taxes: What They Are, How They Work, and Why Your Business Needs Them

Everyone needs to pay taxes, including businesses and larger corporations. For most businesses, payroll taxes are the primary means of paying taxes to the government for the money earned through the business. But when a business is struggling financially, one of the first things to lose track of can often be taxes for the payroll. Fortunately, getting help from tax experts can help you recover and get your business back on track.
Read More...

What Happens If You Have Unfiled Tax Returns?

Maybe you didn't realize you needed to file a return. Maybe you did and just forgot, and now you're out of time. You've just received a letter from the IRS informing you that you've failed to pay your taxes for the last year, and now they're coming after you. However you ended up in this situation, there's no point trying to hide from it. However, all is not lost! Read on to find out how you can resolve your unfiled tax returns and quickly get your taxes back on track.
Read More...

What Happens During Wage Garnishment?

What happens when you owe money you can't pay? There are several ways it can go, depending on what the creditor decides, but one possibility is wage garnishment. Garnishment of wages means that a court (or governmental agency) orders the debtor's employer to send part of the debtor's paycheck directly to the creditor for the purpose of paying off your debt.
Read More...

How to Get Tax Help and Avoid IRS Tax Liens

If you've been unable to pay all your taxes in the past few years, you could be facing a tax lien, which essentially gives the IRS the right to your assets, including any real estate you own. However, there is professional tax help available to avoid IRS tax liens.
Read More...

How Can You Tell When You Owe Back Taxes?

Most Americans try to stay in the good graces of the Internal Revenue Service (IRS) by paying their taxes on time, but even the most diligent of payers can fall behind on their taxes once in a while. Knowing how to tell when you owe back taxes can help you stay on top of your IRS account and take advantage of programs available to assist in paying off tax debt.
Read More...

8 Signs You Should Seek Professional Tax Help

Let's face it: taxes can be complicated. True, some people have straightforward tax situations and can save a few dollars by filing their taxes themselves, but in many more cases, seeking help from a tax professional will be the better option. If it just so happens that you enjoy and are experienced with doing your own taxes, then we salute you, but if not, then here are eight signs that it might be wise to seek professional tax help.
Read More...

How to Choose the Right Tax Resolution Services

When you're dealing with tax debt, you probably know you could use some help dealing with the IRS. However, you might not know where to turn to get the help you need. Following these tips on how to choose the right tax resolution services will...
Read More...

Do You Qualify for Tax Resolution? The Answer May Surprise You!

Not being able to pay your tax debt can be scary, especially since you've probably heard about the heavy-handed tactics the Internal Revenue Service (IRS) can use to collect back taxes. The best thing you can do if you've fallen behind in paying your taxes...
Read More...

Efficiency through Automation!

Because of advancements in our technology, we are able to communicate with the IRS electronically, its as if we are in the same office! Faster service and more cost effective!

Our Money Back Guarantee!

If you are not happy with our tax services within the initial 21 days, we will give you a 100% refund of services rendered, no questions asked!

Price Match Guarantee

You find it, we will match it! Tax Alliance will match and beat (by 10%) any competitive offer. Contact our office today and receive a free no obligation tax consultation.

Call Us
Tax Alliance Logo

Get tax relief today!

Contact us for your free tax assessment consultation
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
🕒 Mon - Fri: 9:00AM - 5:00PM
✉️ info@taxalliance.com
📞 1.800.987.3051
🏢 2002 E. McFadden Avenue, Suite 110, Santa Ana, CA 92705
Vector image of Tax Alliance hero giving a thumbs up
Current Call Wait Time: Under 5 Seconds
Average Form Response Time: Under 30 Minutes

Efficiency through Automation!

Because of advancements in our technology, we are able to communicate with the IRS electronically, its as if we are in the same office! Faster service and more cost effective!

Our Money Back Guarantee!

If you are not happy with our tax services within the initial 21 days, we will give you a 100% refund of services rendered, no questions asked!

Price Match Guarantee

You find it, we will match it! Tax Alliance will match and beat (by 10%) any competitive offer. Contact our office today and receive a free no obligation tax consultation.

Call Us