I.R.S. Problem Resolutions
Tax Audit Representation
Tax audit representation, or an audit defense, is a situation where you, as an individual or legal entity, are in a position where your tax return is being audited and a tax professional represents your interests. Both federal and state income taxes can be audited, however, you have the right to be represented by an individual with proper credentials during the process. This can include attorneys or CPAs.
Don’t Ignore an IRS Letter Request
If you receive notification from the Internal Revenue Service (IRS) requesting further tax information in conjunction with an audit, don’t ignore the letter. It’s important to be compliant with the IRS and to help them with the audit process. However, you should seek professional help in order to protect your personal interests during the process. When you receive a letter from the IRS, make sure to respond, but know you always have the ability to ask for a two-week extension in order to gather the requested materials and find proper representation.
What Should You Do if You Are Audited?
The first thing to remember if you are audited is not to panic. More often than not, the IRS is simply looking for additional information to support your tax return. In some cases, they will request an in-person meeting to discuss your tax returns. At this point, you will need to decide if you want professional representation for your audit. If you simply receive a request for more documentation, you’re probably okay just sending that in. However, for in-person meetings, you’ll want professional tax audit representation in order to provide you with the best possible outcome.
When you need experience and professionalism on your side to represent your tax needs and interests with the IRS, turn to the experienced CPAs and tax professionals at Tim & Associates to represent you during a tax audit. Schedule your free consultation today.
Settling Debt with the IRS
If you’re facing debt collection from the IRS, you have options.
The IRS tax code states: “We will accept an Offer of Compromise when it is unlikely that we can collect the full amount owed and the amount you offer reasonable reflects the collection potential…” (Internal Revenue Code section 7122). An Offer in Compromise provides you the opportunity to pay off all your owed taxes to the government for less than the actual amount, normally for roughly five to 15 percent of the original amount. For an Offer in Compromise, you need the help of an experienced tax advisor in order to figure out the ideal amount to offer for your settlement. The key is to figure out what is the least amount that the IRS will accept in your specific situation before you make an offer. Once your offer is accepted and paid, you will be clear of any outstanding tax debt.
Along with an Offer in Compromise, the IRS also offers installment agreements in order to pay off any outstanding tax debt. An IRS installment agreement allows you to be able to pay back any tax debt overtime and stops any further action from being taken against you, including the power of levy and the seizure of property. This gives you both structure and time to pay off your tax debt and be protected against any negative action. One of the many tax services that we offer at Tim & Associates is the ability to represent you or your legal entity through the installment agreement process to help you get out from under problematic tax debt.
When an individual or a business cannot settle its tax debt immediately they may be eligible to enter into an Installment Agreement. It is a valuable tool and a cash strapped business or an individual may find this to its benefit by stretching the payments over a longer period of time than normally allowed.
Offers In Compromise
Requesting an Offer in Compromise allows a taxpayer an opportunity to reduce its total tax debt owed to IRS or to State taxing authorities by paying a lesser amount in full settlement of their tax debt than they are assessed. To be eligible a taxpayer must prove that they owe the amount and ii) cannot pay the full amount on account of financial hardship.
IRS generally does not abate the interest on the amount that the people owe as tax debt. However, if the taxpayer can prove that the reason for abnormally long time to resolve a tax dispute was due to the delay within IRS, then IRS backs off from charging interest for the period of delay that was not due to taxpayers’ inability to act in a timely manner. Rather, the delay was due to the Service’s inability to act within a reasonable period of time due to lack of timely actions by Service’s personnel.
Innocent Spouse Relief
In a Jointly filed income tax return both the spouses are jointly and individually liable. However, the IRS takes into account abuse and financial control of one of the spouses in determining whether equitable relief should be afforded to the spouse.