What is Tax Resolution: Why Do You Need It?

The main responsibility of the Internal Revenue Service (IRS) is to collect taxes and ensure that everyone follows tax regulations. They also deal with businesses or individuals who are having trouble handling their taxes. 

And when these issues are left unresolved for years, the IRS will eventually intervene to help with the issue. They’ll contact those with significant tax debt and ask them to settle their dues. But for more complicated cases, they’ll start issuing bank levies. 

Luckily, there are plenty of ways for taxpayers to resolve these problems, like getting tax resolution services. 

What is Tax Resolution?

The process of tax filing can be confusing for some people. This can be bothersome because the IRS can flag inaccurate tax reports and delays. 

The tax agency could audit your account or place liens on your properties. Incorrectly doing this will catch the attention of the IRS and flag you for questionable and illegal activities. The best thing you can do to avoid these situations is to find tax resolution services to handle these issues.

Tax resolution is where individuals and tax specialists work together in solving matters with the IRS. Tax resolution may mean lessening your tax debt or creating a comprehensive audit defense on your behalf, depending on what you need.

The main goal of tax resolution is to help you, the taxpayer, deal with any tax liability issues properly.

Why Do Tax Resolution Services Matter?

There are plenty of reasons why tax resolution services are important to companies and individuals. For one, tax liabilities are complicated and confusing. It’s not easy to achieve the best possible outcome when dealing with the IRS. 

But with the help of a knowledgeable representative, you’ll be able to come up with a solution that fits your current financial state. Your tax specialist will assess your situation and help you respond to any letter the IRS sends.

Another great benefit to getting tax resolution services is cost efficiency. Hiring a professional may look like an expensive solution at first, but this will save you time and money in the long run. 

The main goal of tax specialists is to guarantee a favorable outcome for their clients. For instance, if their client has a large debt to the IRS, they’ll suggest solutions like installment agreements and other similar resolutions to make the situation more manageable. 

Regardless of your problems, the specialists you hire will prioritize your interests and needs before anything else.

What Are The Different Types of Tax Resolution Services

Each tax resolution company in the market offers its tax resolution service. But typically, you can choose from nine types of tax assistance. 

Unfiled Tax Returns

Before you can proceed with a tax resolution, most firms will first ask you if you have any unfiled tax returns. If you do, they’ll help you submit everything you’ve missed before proceeding with any unpaid dues. Once they’re done with your unfiled returns, they’ll assist you with any other important tax matters.

Audit Representation

If the IRS sends you an audit notice, it doesn’t necessarily mean you have a major tax issue. Typically, they randomly select a tax return to audit. But in other instances, it could mean that you’ve made an error in your filing. 

Regardless of what led to the audit, you can skip the intimidating process by having audit representation. This service provides you with a tax specialist who will go through the entire proceeding on your behalf. 

Your representative will put together a strong audit defense and meet with the auditors assigned to your case. It’s an excellent solution for companies and individuals who want to avoid dealing with the long process often associated with tax audits.

Currently Not Collectible

The Currently Not Collectible (CNC) status is a form of tax relief for people who can’t afford to pay their tax debts and maintain reasonable living expenses. The agency grants this status to people who can prove their wages and assets are insufficient to cover their dues and livelihood. An expert tax specialist will help you gather all the necessary documentation to file for a CNC status to get the best results.

Stop Wage Garnishment

Another form of levy that the IRS uses is garnishing people’s wages. Instead of collecting your unpaid taxes through your assets, the IRS contacts your employer and asks them to withhold a portion of your paycheck. 

Wage garnishments can either be good or bad, depending on the circumstances. A person who earns enough with a partial paycheck can greatly benefit from this. However, those who can’t afford it need the help of tax specialists to explore other payment options, such as arranging installment agreements.

Innocent Spouse Relief

In certain cases, the IRS charges taxpayers for their spouse’s back taxes. If this is the case for you, an innocent spouse relief resolution would be best. 

This tax resolution protects you from your partner’s poor choices even if you normally file your taxes together. It ensures that only the at-fault party is responsible for their accumulated debt. Your representative will help you gather the necessary documents and file Form 8857 to the IRS.

Installment Agreements

Install agreements is a tax resolution that allows taxpayers to spread their debts and stagger payments over time. 

The IRS has both short-term and long-term payment plans, depending on your needs. The short-term agreement is ideal if you can pay your debt within 120 days or less. But if you need more time to pay your tax bill, you can instead set up a long-term agreement. Take note that this arrangement has additional charges.

If you need help determining which installment plan to choose, you can ask the professional advice of your tax specialist. They’ll help you weigh your options and guide you through filing for them.

Tax Lien Removal

A tax lien is one of the more well-known tools the IRS uses for solving unpaid tax liabilities. Suppose you last paid your debts quite some time ago. In that case, the agency will file a federal tax lien before levying your personal assets. 

The IRS will prevent you from selling your properties or getting any other type of loan in the future. Should this happen, we suggest you contact a tax resolution specialist and ask for their help to appeal your case. 

They’ll introduce a series of strategies, including applying for the Fresh Start Initiative. This program increases the limit for liens and makes it easy for taxpayers to get their liens removed once they repaid their debts.

Tax Levy Release

If the IRS succeeds in filing for tax liens, they will start seizing your properties and bank accounts. To prevent the agency from levying your assets, you have two options: pay your debt in full or hire a tax specialist. 

If paying your tax liabilities is not possible, we recommend hiring a tax specialist to help you explore other possible strategies. Additionally, they can help you directly negotiate with IRS agents and release the levy on your assets.

Offer in Compromise

There’s another excellent solution you can explore besides installment agreements; Offer in Compromise (OIC). When a person proposes an OIC, they can settle their debts for less than the amount they owe.

The amount you propose depends on the value of your assets and overall income. If you want to guarantee higher chances of approval, you will need the expertise of a tax specialist. With their help, you can come up with an appropriate offer that the IRS’ is likely to accept. 

And while this strategy sounds great, taxpayers are still required to pay their outstanding balance while they wait for the verdict of the IRS.

Get The Best Tax Resolution Services You Need Today

While it’s tempting to deal with the IRS on your own, having an experienced tax specialist to represent you protects you from being taken advantage of. Your legal representative will ensure that your rights are upheld and recognized throughout the entire process.

NCH offers comprehensive tax resolution services to various clients, from individuals to businesses struggling with payroll taxes. Our business formation specialists will look deeper into your financial situation and develop a strategy that prioritizes your best interests.

Visit our website here to learn more about our tax resolution and planning services and other essential information for your different needs today.