When you have tax problems, you may end up researching a variety of different tax resolution strategies. You may come across promises to settle your tax debt for “pennies on the dollar” or to “wipe out your tax debt”. While these strategies could work for some people, you should also understand that each individual has a different situation and needs a customized solution.
Your tax resolution strategy will largely depend on your unique situation, including how much you owe, whether you have a legitimate dispute with the IRS, and your overall financial situation.
How Much Do You Owe?
You need to know where you stand with the IRS. Determining how much you owe in tax debt may not be as simple as looking at the most recent tax bill you’ve received from the IRS. That’s because taxpayers who owe the IRS money often owe for multiple tax years and may have unfiled tax returns or delinquent estimated tax payments that the IRS hasn’t discovered yet.
If you have delinquent tax returns, you need to file them before you try to resolve your tax problems. There’s no sense in trying to resolve your tax problems only to have to do the same thing again in a few months when the IRS discovers your unfiled tax returns. In fact, the IRS won’t even consider some requests, such as an Offer in Compromise, unless all required tax returns are filed.
What’s Your Financial Situation?
Tax resolution options are largely dictated by your financial situation. If you’re in good shape financially, but just can’t afford to pay your debt back all at once, an IRS installment agreement may be a good option. There are several types of IRS payment plans, each with slightly different requirements and benefits.
If you’re in temporary financial trouble, you may want to request currently not collectible status. This isn’t a permanent solution, but it will get the IRS off your back and give you some breathing room.
If you don’t have assets to borrow against or sell and won’t have much disposable income for the foreseeable future, you might be a good candidate for an Offer in Compromise. You’ll need to provide detailed financial information and submit an offer that meets or exceeds IRS requirements.
This is just a basic overview of a few tax resolution options. You may want to consider requesting innocent spouse relief, requesting abatement of penalties, or disputing the amount you owe. In some cases, you may want to use multiple strategies at once, such as request penalty relief and then working out a payment plan for the remaining tax debt.
Consult with a tax attorney to get help choosing a tax resolution strategy that’s customized to your needs.
The Gartzman Law Firm offers delinquent tax return preparation and tax settlement help for both federal and state tax debt. Use our contact form to request a consultation with an Atlanta tax resolution attorney.