Frequently Asked Questions
Get answers to your Tax Resolution Questions
What is tax resolution?
Tax resolution is obtaining the best possible solution to any tax problem within the framework provided by the IRS or state taxation agency.
What is the tax resolution process?
The tax resolution process takes place in 3 stages. First, we obtain power of attorney, and use it to determine the full extent of the issue. Then, we prepare and file any outstanding tax returns from the past 6 years. Finally, we determine how much the taxpayer or business can afford to pay back, and negotiate the best available settlement.
My tax return is under audit. Can you represent me?
Yes.
What is an installment agreement?
An installment agreement is a contract between the taxpayer or business and the IRS, whereby they agree to pay back the full amount of tax owed, plus penalties and interest, over a period of up to 120 months.
What is an offer in compromise?
An offer in compromise is a contract between the taxpayer or business and the IRS, in which they request permission to pay back a lower amount than the total taxes owed, plus penalties and interest.
Do I qualify for an offer in compromise?
If your current finances prove that the highest amount you can pay back is less than the total amount of taxes owed, plus penalties and interest, you could qualify for an offer in compromise.
What is a penalty abatement?
A penalty abatement is forgiveness for any penalties incurred, for either not filing returns or paying taxes owed, in a timely manner.
Do I qualify for a penalty abatement?
There are 2 types of penalty abatements, and most people qualify for at least one.
- First time abatement (FTA) – If all returns for the previous 3 years were filed, and no penalties were abated in the previous 2 years, this can be granted automatically.
- Reasonable cause – If your extenuating life circumstances from the tax years in question falls under any of the guidelines that allow for abatement of all penalties, you can request relief by writing a letter to the IRS.
What should I do if I can’t afford to pay the IRS anything back right now?
You may qualify to be put into the Currently Not Collectible (CNC) for the next 12 months
What should I do if my tax preparer missed some deductions on my tax returns?
- If your tax preparer missed a significant amount of deductions, you should definitely get your returns amended to lower the amount of tax owed.
Can I obtain a refund if I amend my tax return to claim more deductions?
- If the return in question is still within the statute of limitations for refunds (3 years), you can be issued a refund for an amended return that claims more legitimate deductions than the original one.
What is the statute of limitations?
There are 3 main statutes of limitations to be aware of: assessment, collections and refunds. For most returns, the IRS has 3 years from the due date of the return or date the return was filed (whichever is later) to audit and assess any additional taxes owed. Afterwards, they have 10 years to collect the unpaid taxes. However, the statute of limitations for refunds is always 3 years from the due date of the tax return.