Tax problems come in various shapes and sizes. You may have problems with your federal taxes, state taxes, or even with sales taxes. As the IRS has continues to boost their enforcement tactics, tax problems can result in serious issues and fines.
If you have received a notice from the IRS or a state revenue service declaring that your business will be audited, your first course of action should be to seek out professional help.
Even if you have been threatened with garnished wages, you can still find a solution before it’s too late.
Common Solutions for Your Tax Problems
Although tax problems may seem like the end of the world, they don’t have to be as stressful as you think. If you are facing an audit or know that you must pay fines, we recommend following these steps:
- Pay the exact amount – Although it may seem like the best course of action to just pay the exact amount on your tax notice, we recommend holding off for the time being, until you can speak to a professional accountant. Tax notices often show inaccurate amounts.
- Pay the correct amount – If you can afford to pay the correct total amount you owe in taxes, we recommend doing so as soon as possible. Speak with the accusing revenue service and see if they can abate your penalty.
- Set up and installment plan – Many people cannot afford to pay the total amount outright. Instead, you can set up an installment system with the revenue service to pay it over a period. Speak with a professional tax advisor to get your monthly payments reduced.
- Offer in Compromise – Also known as an OIC, an Offer in Compromise will typically only be accepted if the revenue service determines that your offer is equal to or above the amount that they reasonably expect you to pay. This is known as the RCP or Reasonable Collection Potential. They will analyze your finances using a 433-A or a 433-B to determine your RCP
Depending on your current financial situation, it may be prudent to follow more than just one of these steps. If you can pay in full, do so. If not, we recommend making an OIC and then setting up an installment plan to pay it off over a period. Before you make any decision, though, be sure to speak with a professional.
Customized IRS Audit & Installment Plan Negotiations
We’d love to sit down and talk about your tax situation and how you can protect as much of your income as possible – legally, ethically, and responsibly.
If you’d like personalized help for navigating the often-confusing tax situation post-coronavirus, please don’t hesitate to contact Robert Hall & Associates at your earliest convenience via the webform here, by phone, or reach me directly via email.
*Note – We don’t assist with OIC or sales tax issues, both of which are mentioned in this blog post.
References
https://www.taxpayeradvocate.irs.gov/get-help/issues-errors/incorrect-tax-return/
https://www.irs.gov/pub/irs-pdf/f433a.pdf
https://www.irs.gov/pub/irs-pdf/f433b.pdf