What is a Tax Resolution Service? Everything You Need to Know

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Tax resolution is a service designed to assist taxpayers in the complicated and often intimidating task of clearing up previously owed taxes or accumulated back taxes. They can act as your representative when dealing with IRS personnel and help negotiate tax settlements and resolve tax problems. If you face potentially severe penalties like garnishment, liens, or a levy, you may be one of the people who can benefit from working with a tax resolution service.

How Does A Tax Resolution Service Help?

When you work with a tax resolution service, you are essentially hiring them to assess your tax penalties and damages and speak with the IRS on your behalf or behalf of your business or organization. Suppose the tax resolution service is respectable and good at what they do. In that case, they will understand and analyze your financial disclosures and other information to find the optimal solution for your situation.

In most cases, the average taxpayer will only qualify for a standard installment agreement. This means that you will need to pay all of your old or outstanding taxes while maintaining your current taxes to be current and compliant. However, when working with a tax resolution service, you may be able to have them negotiate your installment agreement down to the smallest possible payments.

They generally show proof that your financial situation simply cannot handle a larger payment. In many cases, the difference they can make between a regular monthly payment and a smaller payment could be the difference in paying rent that month or even payroll. They can quite literally help you keep a roof over your head or your doors open for business.

Can Tax Resolution Help Prevent An IRS Levy?

If you are about to face an IRS levy, they will need to notify you first, which will involve contacting you through written notices. The IRS will never email or call you on the phone and will conduct all of their crucial business through the mail. If you have received one of these notices you can generally appeal them with the intent of preventing the levy from taking effect.

Many people ignore these communications and simply hope the problem will go away, but the IRS will never go away, this you can be sure of. The best solution at this stage is to leverage a tax resolution service to help negotiate and prevent a levy against you, by arguing that the levy will create an economic hardship for you.

The Average Cost Of Tax Resolution

There are generally two different methods that tax resolution services use to structure their fees and costs. The first way is usually used by less reputable companies and is more of a sales pitch than a solution. They will often connect you to a salesperson who will not know much about the process but will try to sell you a program that will generally cost you thousands without any actual investigation.

The second method is the route that more reputable and consistent services will take and will generally require an initial consultation with an agent who is already licensed to represent the clients to the IRS. This will happen before any fee is charged or collected and determine how much your approximate costs will be. Once the tax liability and solution are determined, you will be given a more specific fee that will often need to be paid before the negotiation and settlement.

Current Compliance

One of the conditions of most offers is that the individual must remain current and compliant on their taxes, or the original burden will be reinstated. This means all potential taxes due, self-employment estimated payments, and payroll deposits must be made on time, or the offer in compromise will be terminated. This cannot be undone in most situations and will lead to immediate collection or levy actions.

Missing Returns Is Often The Hardest Step

One of the most challenging parts of becoming current on your tax obligation is filing old or missing returns. This is another task that tax resolution services can help you with since they will often be able to perform the historical bookkeeping tasks needed to file missing returns. For many people, this step alone is worth the price of the services.

Tax Resolution Doesn’t Have To Be Intimidating

Dealing with the IRS can be incredibly intimidating, and most people would rather do just about anything to avoid it. Tax resolution services are specialists in this interaction and negotiation, making getting current on your taxes and avoiding a potential levy or garnishment much easier.

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