If you’ve received the dreaded tax liability letter from the IRS or state tax agency, you are not the only one. The IRS alone sends millions of letters (for example, the CP14 Notice), annually once a tax liability is assessed, advising taxpayers of what the IRS believes to be taxes due, including any interest and penalties. If the tax remains unpaid after this initial notice, several additional notices may be sent to the taxpayer.
Why would I receive this letter?
Individuals or businesses may receive this notice for several reasons, including:
· IRS believes the business or individual hasn’t report enough income.
· The business or individual has underpaid their taxes.
· The business or individual didn’t file a tax return when they should have.
What should I do next?
Navigating tax issues, both big and small, can be a complex and confusing process. Engaging a tax resolution specialist is often the best course of action. Tax resolution specialists are experts in tax law and IRS financial guidelines. Tax resolution specialists understand the IRS collection process and how to resolve your outstanding tax debt i.e. how to identify and apply different tax strategies. They review and assess your specific tax situation, speak to, and negotiate with the IRS or state agency on your behalf to determine your correct tax liability and evaluate the best strategies to legally minimize the liability.
What are my options?
The options available to clear or reduce your tax liability will vary based on your specific tax situation. A tax resolution specialist works to get you the most favorable outcome possible. Some of the more commonly used resolution alternatives are a Payment Plan or an Offer in Compromise.
1. Payment Plans
There are different types available for consideration depending on the qualification criteria and also on the taxpayer type (individual vs business);
· Automatic Installment Agreement
· Streamlined Installment Agreement
· Regular Installment Agreement
· Partial-Pay Installment Agreement
2. Offer in Compromise
An Offer in Compromise settles your tax liability for less than the amount owed when you are unable to pay the full debt or doing so will create a financial hardship. When assessing an Offer in Compromise, the IRS will consider your ability to pay, income, expenses, and asset equity. It is therefore important that you engage a specialist who is familiar with the formula used by the IRS to determine your eligibility for an Offer in Compromise. None of the “rumors” about the IRS accepting 25% of the outstanding tax liability are true. They are all myths! Get a tax resolution specialist who will advise you, upfront, whether or not you are an eligible candidate for an Offer in Compromise to avoid having your application rejected by the IRS.
If you’re struggling with tax debt issues, let our team of tax resolution specialists take the stress out of it for you. We are here to assess your specific situation, find the best resolution for you, and work directly with the IRS on your behalf, so you can take care of business while we take care of your tax problems. Contact us today for a consultation.