For honest taxpayers, receiving a letter from the IRS can be extremely daunting. Unlike most other government agencies, the IRS has the power to attack your wages, freeze your bank account, and even confiscate your property, which is enough to send shivers down any taxpayer’s spine.
However, if you receive a letter from the IRS stating that you owe additional taxes, it’s essential not to panic. While it may be a daunting situation, you can settle your tax debt and get back on the good side of the IRS by taking certain steps.
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In any case, it’s important to be an informed taxpayer. Below are three strategies you can use to resolve your tax debt and keep your peace of mind. Not all of these options will be suitable for everyone, but knowing what they are can help you set your mind at ease. The IRS can be intimidating, but it can be reasonable if you know what to say and how to approach the situation.
Review the Amount Owed and Your Tax Return in Question
If the IRS says you owe money, don’t assume they are correct. The tax agency makes mistakes, and so do taxpayers and tax preparers.
Whether you filed your taxes on your own or hired someone else to do it for you, it’s crucial to examine your return and compare what you find with what the IRS is claiming. It’s advisable to seek professional assistance for this tax review, even if you initially filed your taxes yourself. A professional with IRS experience may be able to uncover errors and inconsistencies that you would have missed on your own, which could save you money.
While this review may not eliminate the extra taxes the IRS says you owe, it doesn’t hurt to be sure. Many taxpayers who believed they owed money to the IRS have ended up owing nothing or even receiving a refund from the agency.
Set Up a Payment Plan
Getting a notice of additional tax due from the IRS can be frightening, particularly if you cannot afford to pay what the agency says you owe. However, keep in mind that you don’t necessarily have to pay the bill all at once.
The IRS is frequently willing to work with taxpayers and set up payment plans, which could make paying what you owe more manageable and less stressful. Once again, it’s a good idea to seek professional assistance and guidance here. The IRS can drive a hard bargain, and you don’t want to end up with a payment plan you can’t afford.
If you fall behind on the payment plan you agreed to, the IRS may take further enforcement action, including garnishing your paycheck or freezing your bank accounts. Seeking the assistance of a tax resolution professional upfront can help you avoid these serious consequences.
Explore an Offer in Compromise Settlement
If you genuinely can’t pay the amount the IRS claims you owe, you may be able to negotiate a smaller payment. The IRS may not advertise this program, but the tax agency is often willing to work with taxpayers by accepting smaller amounts, particularly if those taxpayers have few assets and limited income. Sometimes, these can be for a fraction of what’s owed if you qualify. We offer a free no-obligation consultation to determine whether you qualify https://calendly.com/premierbusinessstrategist/virtualconsult
If you plan to pursue this last option, it’s crucial to work with a tax resolution expert. These compromise offers can be incredibly complex, with legal language and terms that can be difficult to comprehend. You don’t want to make a mistake here, and you want to ensure that paying the compromised account will result in a complete settlement of your tax bill.