In the US, the Internal Revenue Service, or IRS as it is commonly known, handles the responsibility of collecting federal taxes and ensuring that tax laws are followed. Many people think of the organization only when it is tax season and don’t understand what else the IRS is in charge of.
The IRS Data Book is an annual publication that contains key statistics and summary graphs of the fiscal years. During the recent fiscal year of 2019, IRS collected more than $3.5 trillion and processed more than 253 million tax returns while issuing more than $452 billion in tax refunds.
This shows that the IRS handles the processing of tax returns, distribution of tax refunds, and collection of tax money. Apart from these, IRS has an important role in notifying companies and individuals if a business hasn’t reported enough income, they underpaid their taxes, or they haven’t filed a return at the designated time. The situation may often require the authority at the IRS to take action.
However, when such a situation arises, the individual or the company involved seeks tax resolution services to solve the issue legally by paying back taxes or applying for tax relief. That’s why every citizen needs to be aware of what tax resolution is.
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Tax Resolution and Tax Relief
Tax Resolution and Tax Relief services are designed to assist taxpaying individuals and companies through complicated situations regarding paying taxes. Basically, it is a legal process of negotiating with the IRS through tax resolution companies and tax resolution specialists to find a solution to your tax problems.
How Do Tax Resolution Companies Help
While there are many warning signs that the IRS might be getting to you, the most probable issues start with an insufficient tax return. It can lead to a situation becoming overly complicated. That is when tax resolution companies enter the picture. You may need a tax resolution specialist to help solve the issue and get back on track by avoiding charges more than you owe to the IRS.
The following are some instances where you might require tax resolution services:
Audit Representation
If you receive a notice from IRS that you will be audited, there is no need to panic. Chances are that you have a complicated tax return, and the IRS just wants to audit to verify if you are reporting legitimate deductions and income amounts.
Although the audit procedure is daunting with the IRS taking a closer look at your business finances, it is not something you can fight off on your own without making yourself look suspicious and putting your business on the line.
Hiring a tax resolution specialist would ensure a legal and strategically put-together audit defense to help you get out of the situation securely. It will help you gather appropriate information and understand that the audit results would be fair and accurate.
Tax Penalties
Tax penalties are imposed by the IRS in the form of interests and other charges when businesses and individuals fail to pay their taxes on time or don’t pay taxes at all. Even though there are instances when the IRS may waive off the penalty, most of the time, it becomes a lengthy process of financial representation and multiple audit checks.
Hiring someone with tax resolution services experience from a tax resolution company would help you determine if you are eligible for a tax penalty waiver or reduction. The firm will help you throughout the process from start to finish if you qualify for an appeal.
Un-filed Returns
The law dictates that people file tax returns each fiscal year. But what is fixed by law is not necessarily fixed by nature, and life instances and unprecedented circumstances may not allow you to file for a tax return. In such a situation, IRS makes an assumption based on the company documents such as Forms W-2 and 1099 to calculate the tax amount you may owe them.
That is where you would require help from a tax consulting firm as even the IRS can make mistakes and charge you more than you owe them. A tax resolution specialist from the firm would help you prepare returns from past years and file them currently. You may also determine a tax plan for the future to stay on track.
Paying Back Taxes
In case you owe back a large amount of taxes, it is probable that you cannot pay the lump sum amount immediately. A tax resolution company would work out a plan on your behalf with the IRS to make paying back taxes more manageable for you. It would help you in staying secure while you pay off your levied taxes and not get into trouble with the authorities.
Compromising with IRS Authorities
In some rare instances, IRS may be open to communicating and negotiating with taxpayers. It usually happens when a company or an individual owes them a hefty amount and has gone through a rough financial period due to natural occurrences.
IRS has a program called Offer in Compromise, where they accept a payment that helps the taxpayer and allows them to pay less than what they owe. It is extremely tricky to obtain, and a tax resolution company may only negotiate their way through for you.
Conclusion
To summarize, taxpaying is a complicated and tricky matter at most. It is better to stay away from complicated financial situations by paying appropriate tax amounts and filing tax returns on time.
But if you happen to find yourself stuck in a situation, Polston Tax can get your financial life back on track with their top attorneys providing tax resolution services. Why try to deal with the IRS on your own when Polston Tax can remove that burden from your shoulders?
Contact our tax resolution firm today!
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