IRS Notices

The Essential Guide to IRS Tax Resolution Options

The Essential Guide to IRS Tax Resolution Options

There are few things more alarming for taxpayers than realizing they are in trouble with the IRS. Whether a person owes personal back taxes for years, failed to properly file self-employment taxes, or ran into trouble with a business venture, there are numerous IRS problems that can occur.

Thankfully, there are also a number of tax resolution options available to taxpayers.To simplify the process, it is always wise to work with a qualified local tax professional who can represent you in front of the IRS.

Here, you will learn about a number of popular IRS tax resolution choices.

Offer-In-Compromise

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An offer-in-compromise is an agreement between a taxpayer and the IRS that allows tax debt to be paid-off for less than the actual amount that is owed. It is important to note, however, that not everyone qualifies for an offer-in-compromise.

The IRS provides an online pre-qualifier tool for those who believe they may be eligible to submit an offer-in-compromise application. The tax agency takes several key factors into consideration, including:

Ability to pay

Income

Expenses

Asset equity

Installment Agreements

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It is important to note that the IRS treats short-term payment plans and installment agreements differently.

Short-term plans are designed for taxpayers who can pay-off their tax liability in 180 days or fewer. While there is no additional fee for short-term payments, the IRS notes that applicable penalties may still accrue.

Installment agreements, on the other hand, are designed for taxpayers who will be unable to pay-off their full tax debt in six months. There are a few different options for how monthly payments can be debited:

Direct debit from your bank account,

Payroll deduction from your employer,

Payment by EFTPS,

Payment by credit card or debit card via phone or Internet,

Payment via check or money order,

Payment with cash at select retail partners

Innocent Spouse

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In certain circumstances, innocent spouse relief is an option for taxpayers who believe they are not personally liable for all of the taxes owed by their husband or wife. The IRS does have specific eligibility requirements for this type of tax resolution.

It is also important to note that innocent spouse relief is exclusively available for taxes due on the other spouse's income from ordinary employment or self-employment. Relief is not available for taxes due on:

The taxpayer’s own income

Household employment taxes

Individual Shared Responsibility payments

Business taxes

Trust fund recovery penalties for employment taxes

Remember that it is best to approach your tax resolution case with the help of a skilled tax expert in your area. He or she will be able to guide you through the process and determine which tax resolution option – or combination of options – is best for you.

Have you ever had an IRS tax problem?

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Spencer Wilson

Spencer Wilson

Spencer Wilson, EA is a tax preparer based in Long Beach, CA. Spencer Wilson Financial Management Services has been serving the Greater Los Angeles Area and Orange County since 2004. <br /> We began in the heart of Naples in Long Beach and we continue to work hard offering tax preparation and planning, business accounting and bookkeeping and payroll services . <br /> We have helped many different people and businesses succeed financially and take control over their finances.

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