What Is Tax Resolution and How Does It Work?

The Internal Revenue Service (IRS) collects federal taxes and ensures that people follow tax laws. Most people think about the IRS when it is time to file their tax return and wait to get their tax refund. However, there are times when the IRS may make its presence known. For instance, when you or any business has not reported enough income, underpaid, or not filed a return. When this happens, you may need tax resolution services to help you resolve these issues, pay back taxes, or get tax relief. Read on to discover what tax resolution is and how it works for your company.

What is Tax Resolution?

Tax resolution or tax relief are the services designed to help you through the complex task of resolving tax issues. The process involves working with a tax relief company to find solutions to your tax problem. You need tax resolution services for several reasons, including complicated tax returns, not filing your returns for several years, and tax penalties. Sometimes the IRS may lose all its patience and decide to recover unpaid taxes forcibly. This can take the form of a tax lien on your property or a bank levy.

Tax Resolution Companies.

If you seek the help of tax resolution companies, you will be hiring professionals to assess your tax problem and speak on your behalf or your company. A reputable tax resolution firm will know what to do and determine what solutions you qualify for. Your tax resolution firm may also negotiate the lowest possible instalment payments.

Costs.

Tax resolution companies work in two ways. The first way is to connect you with an inexperienced salesperson who can launch an investigation where you can pay thousands of dollars to research what needs to be done. After the investigation, you will pay an additional fee to address the issue. The second way is to consult with a licensed professional to represent you with the IRS before paying any fee. These professionals will ask you several questions regarding your situation and assess what needs to be done. You can then expect to spend at least a thousand dollars for the simplest solution and tens of thousands of dollars for the most complex cases. Always ask whether the company is licenced to present you before the IRS before the consultation.

How Does Tax Resolution Work?

The IRS is more sympathetic than you may think. The IRS has several tax resolution services that provide tax relief to qualified businesses and individuals. Some of these programs include liens, instalment agreements, and offer in compromise. You can apply for any of these programs independently, but it is essential to work with a tax relief company to ensure the process runs smoothly and increase your chances of getting the relief you need.

Penalties.

Besides providing a solution to your tax problem, tax resolution services can also eliminate some or all of the penalties you have been assessed. The IRS will agree to forgive penalties if you have a reasonable cause for not filing your returns. Your tax relief representative will listen to your story and focus on the specific details that the IRS would consider appropriate. Some penalties are also forgiven by law as first-time penalty abatement. If you have a history of good compliance and incurred a penalty for the first time in three years, the IRS may forgive the penalty.

Hiring the Best Tax Relief Specialist.

When hiring a tax relief specialist, you have to consider some factors such as qualification, experience, specialization, and costs. Choose a representative who meets specific academic qualifications like a Bachelor’s degree in accounting or law. Your specialist should also be a Certified Tax Resolution Specialist (CTRS). Experience is also another crucial thing. An experienced tax professional understands the ways of the IRS and has a network of contacts that can benefit your case. Tax issues and their methods to solve them are also varied. As such, you need an expert who has a track record in solving your particular tax problem. A domestic tax specialist may not be familiar with international tax law. Also, ensure that you go online and find out about his performance through client reviews and ratings. Previous clients will give you honest information about the tax expert as opposed to the information found on his website.

Investing in a tax resolution specialist can seem like a waste of money and time. However, they can significantly improve your tax situation and help you save money in the long term.

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