Owing money to the Internal Revenue Service is a serious issue that you shouldn’t take lightly. While you may be tempted to ignore the problem and hope it goes away on its own, doing so will only worsen your penalties. Instead, you should understand the possible solutions to settle your tax debt and resolve the issue.
Tax resolution services are companies that help you understand your options for paying back tax debt. They often consist of IRS tax resolution lawyers, CPAs, and other tax professionals with an in-depth understanding of tax law. Learn what these companies do and how they can assist you.
What Is a Tax Resolution Service?
The IRS offers several programs to help you settle tax debt, and navigating these programs yourself can be overwhelming. That’s why many taxpayers turn to tax resolution services for assistance when they owe money to the IRS.
A tax resolution service can examine your financial situation and help you understand which remedies you may qualify for. They can walk you through the process of applying for tax resolution programs and review your application to ensure it has the best chance of approval. They can also help you minimize your tax debt to avoid paying more than you really need to.
You can find tax resolution services for individuals and businesses.
Types of Tax Resolution Programs
Your IRS tax resolution lawyer will explain all of the following programs and help you understand which ones you may qualify for to lower or settle your tax debt:
- Installment agreement: You may be able to create a payment plan with the IRS to make monthly installments instead of paying your tax bill in a lump sum.
- Offer in compromise: If you are going through financial hardship, the IRS may allow you to settle your tax liability for a lesser amount.
- Innocent spouse relief: If the tax debt came from your spouse, you may be able to seek relief from joint liability in some cases. A tax resolution service can help you understand this program.
- Bankruptcy: For some taxpayers, declaring bankruptcy is the best option to dig themselves out of a mountain of debt.
- Appeal: If you believe the IRS has made an error in reviewing your tax returns, your tax resolutions service can help you file an appeal, which is an involved process that requires extensive evidence.
While qualifying for an installment agreement or offer in compromise would be nice, not everyone is eligible for these programs. Instead, you may need to declare bankruptcy or approach your tax issues in another way.
Tax resolution services have plenty of experience helping taxpayers navigate back taxes. Your company may be able to present a solution that you wouldn’t have thought of on your own.
What Happens If You Ignore Tax Debt?
While you may be able to ignore other types of consumer debt without much direct penalty, the IRS takes back taxes very seriously. If you don’t pay your tax debt, the organization will exert its power to take the money from you, such as through:
- A tax lien, which would allow the IRS to seize your assets and sell them to pay off your tax debt.
- Wage garnishments, in which your employer would give a portion of your paycheck to the IRS each month until you have settled your tax liability
These consequences can significantly lower your credit score, limiting your future financial opportunities.
Instead, enlist an IRS tax resolution lawyer to help you approach your tax debt strategically. Call Levy & Associates, Inc., today at 800-TAX-LEVY or contact us online for a consultation.