At a glance
- Tax resolution helps you address complex tax obligations and IRS issues.
- Options include payment plans, offers in compromise, and penalty abatement.
- Professional tax resolution services can provide expert guidance and representation.
- Ignoring tax issues can lead to serious consequences, including wage garnishment and property liens.
What is tax resolution?
Tax resolution refers to the process of solving tax-related problems with the Internal Revenue Service (IRS) or state tax authorities. This can include addressing unpaid taxes, negotiating payment plans, or resolving disputes over tax assessments.According to the IRS, 18.6 million taxpayers owed over $316 billion in 2024, with an average balance of $17,000 per taxpayer. If you're facing tax issues, you're not alone. Solutions are available.
How tax resolution works
Tax resolution typically involves the following steps:
- Assessment: Evaluate your tax situation, including the amount owed and any penalties or interest.
- Strategy: Determine the best approach to resolve your tax issues based on your financial situation.
- Negotiation: Work with the IRS or state tax authority to reach an agreement.
- Implementation: Put the agreed-upon solution into action.
- Compliance: Ensure ongoing compliance with tax obligations to prevent future issues.
Types of tax-resolution options
Prompt Payment
- Pay your tax debt in full, including penalties and interest.
- Consider using a personal loan if the interest rate is lower than IRS installment agreements.
Payment Extensions
- Request short-term extensions online or by phone for temporary relief.
Electronic Funds Transfer
- Use the Electronic Federal Tax Payment System (EFTPS) for direct payments to the IRS.
Installment Agreements
- Set up a payment plan if you can't fully pay your tax debt.
- Options include short-term plans (180 days or less) and long-term plans.
Offer in Compromise (OIC)
- If you qualify, settle your tax debt for less than the full amount owed.
- Requires detailed financial information and may have strict eligibility requirements.
Currently Not Collectible Status (CNC)
- Temporarily pause collection activities if you can prove financial hardship.
- Debt continues to accrue penalties and interest.
Penalty Abatement
- Request the removal of specific penalties if you have a reasonable cause for non-compliance.
How to get started with tax resolution
- Gather all relevant tax documents and correspondence from the IRS.
- Assess your financial situation and determine how much you can realistically pay.
- Research your options or consult with a tax professional.
- Contact the IRS or use their online tools to begin the resolution process.
- Consider using a professional tax resolution service for complex cases.
Choosing a tax resolution service
When selecting a tax resolution service, consider the following:
- Look for transparent pricing and beware of companies that aren't upfront about costs.
- Check for proper licensing and credentials of the tax professionals.
- Understand the services offered and ensure they match your needs.
Why choose Turnout for tax resolution?
At Turnout, we offer comprehensive tax resolution services with several benefits:
- Strategic guidance from live tax professionals
- AI-enhanced service with Jake, our virtual assistant
- Clear, upfront pricing with no hidden fees
- Free tax preparation for the upcoming year with every order
FAQs
Can I negotiate with the IRS on my own?Yes, you can negotiate directly with the IRS. However, complex cases may benefit from professional representation.Will tax resolution affect my credit score?Some resolution methods, like installment agreements, may appear on your credit report. However, resolving your tax issues is generally better for your long-term financial health.What happens if I ignore my tax debt?Ignoring tax debt can lead to serious consequences, including:
- Accumulating penalties and interest
- Property liens
- Wage garnishment
- In extreme cases, legal action
Can tax resolution help with state taxes as well?Yes, many tax resolution services can assist with both federal and state tax issues.