Tax Debt Resolution

Tax Debt Resolutions refer to the various ways in which an individual or business can resolve outstanding tax debts owed to the Government. These can include payment plans, challenges to the debt owed. as well as other legal maneuvers which could reduce the debt. It is always best that Individuals or businesses contact an experienced Tax attorney, prior to speaking to the Government.

Tax debt can happen in any of the following ways: (1) Taxpayers receiving 1099’s can find themselves owing tax debt; (2) Small business owners may have Independent Contractors recategorized as employees and may be assessed employment tax, unemployment tax, Social Security tax, and income tax, although nothing was withheld; (3) Some taxpayers prepare their tax returns themselves or may use a commercial return preparer which did not employ any Certified Public Accountants (CPA’s) and then later learn to their horror, that mistakes were made and they owe taxes; (4) Small business owners trying to keep the doors open in a “rough patch” may use money set aside to pay taxes to cover operating costs; (5) Operators of a business which is not incorporated may have numerous claimed expenses denied by aggressive auditors, who then claim that they owe a substantial amount of taxes; (6) The sale of real property which generates a 1099 may cause the IRS to improperly impute gains and taxes; and (7) An employee of a company who has check writing authority may be assessed tax owed by that business, even though they do not own the company or make any decisions. While these are a few common examples there are many other reasons for tax debt.

Regardless of how the tax debt occurred, if you owe more than $5000, you do not want to try to resolve your tax debt alone. In most cases IRS and State Tax Agencies will have you committing to make monthly payments that are not affordable and possibly paying taxes you do not in fact owe. Before speaking with the IRS or any State Tax Agency that is trying to collect tax, you must and should contact a tax attorney who specializes in tax debt resolution, and not a CPA. A tax attorney can take IRS or any State Tax Agency to court, which gets their attention. An experienced tax attorney can determine what legal basis to use, to challenge the tax allegedly owed. Only tax debt which cannot be successfully challenged should be paid. Once the attorney challenges the tax debt, they then can correctly custom tailor what is the most favorable repayment plan. Examples of such plans are an Offer in Compromise, an Installment Agreement or a Partial Pay Installment Agreement, it all depends on each taxpayer’s unique situation. Finally, after the challenges have been made and your custom-tailored tax debt resolution is in place, your tax attorney can file for Penalty Abatement which also reduces the final amount that is paid.

TV Advertisers offering tax resolution services can sound convincing. However, usually they are not able or willing to challenge the tax debt. Therefore, the taxpayer ends up paying more than they need to. Every tax lawyer knows the art of negotiation which is needed to get the IRS and State Tax Agencies to compromise and reduce both the total amount owed and the monthly payment amount. This enables the taxpayer to resolve their tax debt while continuing to maintain their lifestyle. Many taxpayers have wasted time and money using these advertisers only to ultimately hire a tax attorney for their tax debt resolution.

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