What is Tax Resolution?
Tax Resolution is the process of resolving outstanding tax liabilities from previous tax returns with the IRS. Tax resolution may involve one or more of the following: negotiating a payment plan, extending the filing deadline, or making an offer in compromise. The key is to reduce the risk of a future audit and penalties while still paying what you owe as soon as possible.
If you received a CP2000 notice from the IRS and have an unresolved tax liability, you will need to initiate some form of tax resolution with them to avoid a further audit, penalties, or interest charges. A qualified Tax Resolution Specialist can help negotiate your way out of this situation and reduce your tax liability so that you only pay what you owe. There are many common reasons why people end up owing taxes when they don’t meet their annual filing obligations. These include inadvertently missing a form, having outdated information about deductions or credits that have changed since last year’s return, or simply being unaware of your responsibilities as a taxpayer.
Negotiate a Payment Plan
If you have been contacted by the IRS and believe you can resolve the issue, then you should consider negotiating a payment plan. The IRS is always looking for opportunities to reduce their administrative burden and will likely be willing to accept monthly payments if you can show the ability to pay. When negotiating a payment plan with the IRS, you must have a source of income that can be reliably used to make those payments. This might be regular wages from an employer, a cash flow from a side business, or even a small pension or social security payment. If you have assets that can be used as collateral for a loan, you might be able to get the cash you need to make the payments yourself.
Extend the Filing Deadline
Extending the filing deadline is something that the IRS will allow you to do, but only under certain circumstances. The most common reason for filing a request for an extension is that you don’t yet have all the information you need to file the return. If you’ve already prepared your taxes but need more time to get them in, the IRS may be willing to extend the deadline for you to file. You’ll need to send a request for an extension either in writing or online and indicate why you need more time. The IRS will likely only extend the filing date to October, so you will have to file your return as soon as possible after that date. If you have prepared your taxes but are waiting on a related payment to arrive, such as a refund from the state or insurance company, you might also be able to get an extension. In this case, you will have to submit a copy of the receipt showing that you’ve been paid and indicate why you expect to have a delay in receiving the payment.
Make an Offer in Compromise
An offer in compromise is an agreement between the taxpayer and the IRS in which one party agrees to accept less than what is owed. This option will only be offered by the IRS if the amount you owe is significantly higher than your ability to pay.
To make an offer in compromise, you will typically need to hire a tax resolution company that can help you navigate the process and provide documentation supporting your financial situation. An offer in compromise is the last resort and should only be pursued if you owe significantly more than you are currently able to pay. This can be a lengthy process, and there are no guarantees that the IRS will accept your offer.
Hiring a Tax Resolution Company
If you have received a CP2000 notice from the IRS, you may feel like you need to pursue tax resolution immediately. If you have missed the filing deadline, have not yet filed an extension, or have been denied an offer in compromise, you may not have time to pursue other forms of resolution with the IRS. In this case, you may need to hire a tax resolution company to help you navigate the process and avoid further penalties and interest. An experienced tax resolution company will know exactly what is required and what the IRS will accept when negotiating your payment plan. They will also be able to help you prepare your documentation for an offer in compromise and make sure you avoid an audit.
Conclusion
If you have received a CP2000 notice from the IRS, you need to initiate some form of tax resolution with them to avoid further audits or penalties. A tax resolution specialist can help with this process. If you are in a situation where you owe significant taxes but are unable to resolve the situation yourself, a tax resolution company can help with this process.
Family Tax Relief Can Help Resolve Your Tax Issues
Family Tax Relief is committed to helping taxpayers find a way to reduce their debt. If you’re facing a hefty tax bill, have years of unfiled tax returns, are being audited or have another tax-related issue, our team can review your situation and put together a payment agreement with the IRS or reduce the amount you owe. We’re based in California, but we serve people and businesses across the United States. We assist taxpayers with both federal tax concerns and state tax issues.
Everyone’s tax situation is unique, and the type of results you get will depend on your circumstances. To learn more about the tax relief options that might be available to you and how Family Tax Relief can help you solve your tax problems, contact us today.
