Tax Accountant Firm: What is Tax Resolution?

Tax Accountant Firm | woman reviewing her tax documents

Tax Accountant Firm

Tax Accountant Firm | Tax resolution is a blanket term that means solving your tax disputes with the IRS or the state tax agency. Usually, the term refers to IRS tax disputes.

Taxpayers can choose from a number of options to protect themselves. The aim should be to solve the dispute with the IRS before it turns into a legal proceeding.

Let us discuss what is tax resolution, which options you can choose from, and how does it and a Tax Accountant Firm benefit you.

What is Tax Resolution?

Tax resolution refers to a process of working with the IRS or a tax professional to solve your tax problems. The IRS can pose questions on your tax returns and you get a call for the audit as well. For this reason, it’s best to have a Tax Accountant Firm on your side.

Generally, a tax resolution is required when the IRS thinks you owe more in taxes than you filed for. In such situations, you can put a defense against the IRS directly or with the help of a professional tax agent such as a CPA.

Tax resolution is a general term, in practice, there are several routes that you can choose from to resolve your tax issues with the IRS.

Why You Should Consider Tax Resolution with a Tax Accountant Firm?

The foremost and important reason to go for tax resolution is to protect yourself against litigation. You would want to resolve any tax disputes as soon as possible before they turn into legal proceedings against you.

The IRS can take several actions against tax defaulters. Some common examples include:

  • Seizure of property
  • Garnishing wages
  • Levy bank accounts of defaulters
  • Imposing tax liens

In practice, many businesses and individuals consider tax resolution when they are in a predicament where they need to pay more taxes than they actually have. In other words, when taxpayers find themselves in trouble with settling tax obligations. Avoid these situation by having a reliable Tax Accountant Firm.

Common Types of Tax Resolution

There are various scenarios and reasons to opt for tax resolution. Each scenario demands a different approach and a plan of action to solve tax disputes.

Here are a few common scenarios or types of tax resolution.

Installment Agreement

This option allows taxpayers to settle their debt with the IRS in installment. Under this agreement, the taxpayer agrees to pay back tax obligations over the years in small and manageable installments.

In some cases, taxpayers cannot settle or pay all installments as agreed with the IRS. Both parties can reach a partial payment installment plan that favors taxpayers through the statute of limitation.

Offer in Compromise

The offer in compromise (OIC) is an agreement between the IRS and taxpayers to settle for a lower amount than is actually owed.

The OIC is a complex process and it can take one of the three routes. These options include doubt as to collectability, doubt as to liability, and effective tax administration.

Reasonable Cause

This option is chosen when taxpayers have a significant reason or “cause” that hindered their tax obligation duties. Simply put, if taxpayers can prove they tried their best but could not meet their tax obligation, they can opt for the reasonable cause option of tax resolution.

A taxpayer has to prove the reasonable cause, so it varies by applicant. Some of these include a serious injury, death of a family member, unavoidable absence, and so on.

Penalty Abatement

Some taxpayers can default on their tax obligations once in a while. They may face life hardships, joblessness, or any other circumstances that prevented them to make full or partial tax payments.

In such scenarios, taxpayers can opt for the first-time tax abatement option.

Lien Relief, Lien Release, and Lien Withdrawal

In some cases, taxpayers can face a lien on assets from the IRS. Then the IRS issues a lien, they announce to start a proceeding for the seizure of assets of the taxpayer in the dispute.

Taxpayers would find it harder to get credit to pay their obligations. They can apply for a lien release. It means the IRS does not hold possession or intend to seize the assets of the taxpayer.

A lien release is a case when the IRS drops all seizure claims against the taxpayer as if they never existed.

How Does Tax Resolution Benefit?

Settling tax obligations with the IRS can become a perplexing task. You wouldn’t want to end up in litigation with the IRS.

A tax dispute with the IRS prolonged can affect your overall financials as well. Seeking help from a professional Tax Accountant Firm can help you avoid these issues.

Moreover, you have the right to protect yourself against any charges put by the IRS. A professional tax resolution service provider can ensure your rights are protected.

Learn More with Our Tax Accountant Firm

Our Tax Accountant Firm, Ash CPA offers tax resolution assistance. Learn more by scheduling a consultation, in-person or virtual. Call (617) 462-6651 or book online.