Your Guide to Tax Solutions & Resolution Options
There are few times more dreaded in the United States than tax season. The tax code is murky and complex to the average taxpayer, and as a result, it’s easy to misunderstand your rights and obligations. If you’ve found yourself with tax issues, don’t panic — tax problems are common, and there are solutions available to you.
Your first step is to find a reliable tax relief attorney in Rochester, NY. At McLaud Law, we understand how stressful personal and business tax issues can be. We’re here to learn more about your concerns, explain your options to you, and help you decide on a path forward. Call us at 585-397-7785 or request a consultation online now.
What Are Tax Relief Services?
Tax relief services refer to specialized solutions for taxpayers who have some sort of tax issue, whether it’s undisclosed income, unfiled tax returns, falsified deductions, or unpaid taxes. Tax resolution services encompass a wide variety of options that aim to help taxpayers like you become compliant with IRS requirements without facing legal issues or unnecessary penalties.
It’s important to note that there are many different companies that offer tax support, and they vary quite a bit in terms of the value they offer. When choosing a company, make sure that you’ll be working directly with experienced, licensed tax professionals who can tailor their services to your needs.
Depending on the specific details of your situation, a tax relief professional may negotiate with the tax authorities, gather information on your tax history, develop payment plans, explore different relief options, and assist you with complex tax returns or situations. At McLaud Law, our goal is to make your life easier, untangle the tax issues that have been burdening you, and help you get a fresh start.
Types of Professionals Who Provide Tax Relief Assistance
There are several types of licensed professionals who can assist you with your tax problems. The options include:
- Tax attorneys: Tax lawyers have in-depth education and experience in tax laws, regulations, and solutions. They can provide legal advice, negotiate directly with state and federal tax authorities, and represent clients who are facing tax-related legal problems. They must be admitted to the United States Tax Court to handle tax cases.
- Enrolled agents: The IRS authorizes enrolled agents to represent taxpayers in tax disputes. To become licensed, they must either pass a three-part IRS test or work for the IRS for a certain number of years. Many have backgrounds in the legal, accounting, and related fields.
- Certified public accountant: Certified public accountants have high-level education and technical training in accounting. They have at least a bachelor’s degree, and many also have a master’s degree in accounting. They help clients with tax planning and tax return preparation.
Note that all of these professionals have unlimited practice rights before the IRS, meaning that they are allowed to represent taxpayers and handle all types of tax matters before the IRS, but their training and skill sets differ. At McLaud Law, we have a tax attorney and enrolled agents on our team.
IRS Payment Plans and Relief for Unpaid Taxes
IRS payment plans let you pay your back taxes in monthly installments, and they are a viable option for many taxpayers. When you request an installment agreement, the IRS typically stops any levying actions and pauses their time to collect while reviewing your request.
If the IRS approves your payment plan, they will charge a setup fee for certain types of Installment Agreements. Taxpayers who have an AGI at or below 250% of the federal poverty level may be able to have their fees waived. The amount you owe continues to accrue interest and penalties until it is paid in full.
There are short-term and long-term payment plan options. Short-term payment plans allow taxpayers to stretch their payments over a period of 180 days or less. A long-term Installment Agreement is anything that lasts more than 180 days. Generally, you can take up to six years to pay, but in some cases, the IRS will let you make payments until the collection statute expiration date (up to 10 years after assessment).
Once your payment plan is approved, you do have some flexibility. You can change your due date, switch to direct debit payments, change your bank account, or change the amount you pay each month as long as it meets minimum requirements.
If you are unable to pay the amount you owe in full, even with a payment plan, a PPIA may be your next step. A Partial Payment Installment Agreement sets up monthly payments that you pay until the Collection Statute Expiration Date. Generally, the CSED is 10 years from the tax assessment date, but certain events alter this time frame, so it takes professional attention to calculate. Once you reach the CSED, the IRS won’t collect the rest of what is owed.
Does the IRS Forgive Taxes Owed?
If you owe a lot or have limited income, the minimum monthly payment for an installment plan may be too high for you. Don’t worry–there are still several more tax resolution options available to you, depending on your situation, your income and assets, and your role in your tax issue. Options include:
- Offer in Compromise: An Offer in Compromise settles your tax debt for less than what you actually owe. You are able to avoid further collection actions from the IRS without having to pay your tax debt in full. Note that the IRS is selective about what it will accept—they want to collect whatever they can. They consider factors like your income, ability to pay, basic expenses, and assets. If your offer is what they could reasonably expect to collect from you in a set period of time, they may accept it.
- Currently Not Collectible: If you genuinely cannot pay your tax bill, the IRS may place you in Currently Not Collectible status. This is not permanent and doesn’t mean that your taxes have been forgiven—CNC status means that you still owe them, but the IRS has temporarily ceased collection activities. They will review your financial status periodically, and once they consider you able to pay, you will then have to start making payments again. In the meantime, interest and penalties accrue, and any tax refunds you receive will be collected and applied to the amount you owe.
- Innocent Spouse Relief: Few things are as stressful as finding out that your spouse has been keeping financial secrets from you. If your spouse underreported their income on your joint tax return, the innocent spouse relief program may allow you to avoid paying additional taxes. Relief is only granted for the taxes due on your spouse’s employment or self-employment income, not your own income, household employment taxes, business taxes, or other types of taxes.
- Penalty Abatement: If this is your first time running into issues with the IRS and you have a good history of on-time payments and filings, you may be able to avoid penalties on the amount you owe. You can qualify for a First Time Abatement if you failed to file, failed to pay by the due date, or failed to deposit. The IRS may also waive penalties for reasonable cause such as filing late due to a death.
- PPIA: The PPIA, discussed in greater detail above, lets you settle your tax debt for less than the total due over a period of time.
Help With IRS Audits and Appeals
The Rochester tax team at McLaud Law can also help you with other common tax situations, such as an IRS audit. The audit process can be stressful and time-consuming, so having a tax lawyer represent you throughout the process can help you avoid issues. Your attorney may handle communication with the IRS, verify that you are compliant with tax laws, or help you find areas where you can improve, and negotiate on your behalf if you are non-compliant in any area.
If you disagree with the results of the audit, you can appeal. Additionally, if you request relief from the IRS and you are denied, you can appeal their decision. You can also appeal if the IRS proposes a collection action against you, such as a lien or levy. The appeals process generally involves strengthening your case by providing supporting information and documentation, and a tax attorney can be critical for a successful appeal.
Relief for Criminal Tax Issues
If you’re dealing with criminal tax issues, you need an experienced tax attorney to represent you. Depending on the situation, your attorney may advise you to take advantage of the IRS’s criminal investigation voluntary disclosure practice. If that’s not an option, they can represent you through the litigation process.
Important Tax Relief Forms
Anything you do with the IRS is bound to involve substantial documentation and paperwork. Luckily, they do make important tax relief forms available on the IRS website for taxpayers’ convenience. Important tax resolution forms include the following:
- Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals
- Form 433-B, Collection Information Statement for Businesses
- Form 433-D, Installment Agreement
- Form 656, Offer in Compromise application
- Form 656-L, Offer in Compromise (doubt as to liability)
- Form 9465, Installment Agreement Request
- Form 1127, Application for Extension of Time for Payment of Tax Due to Undue Hardship
- Form 8857, Request for Innocent Spouse Relief
- Form 843, Claim for Refund and Request for Abatement
- Form 12153, Request for a Collection Due Process or Equivalent Hearing
- Form 9423, Collection Appeal Request
- Form 911, Request for Taxpayer Advocate Service Assistance
Often, you need to file multiple forms to deal with tax issues. For example, if you owe back taxes and penalties, you may want to file Form 843 to request penalty abatement. Then, you may want to file Form 9465 to request a payment plan, and if you owe over a certain amount or cannot make the minimum monthly payment, you may also need to provide a collection information statement such as the 443-A. Making proper use of these forms is rarely simple, and there are many pitfalls to avoid, so it is always advisable to consult with an experienced tax professional like those at McLaud Law before submitting any information to the IRS.
What to Avoid When Choosing a Tax Relief Company
When you look at the range of tax relief options available, it’s hard to know what you should look for in a company. To protect yourself financially, you need a tax pro who has experience with your tax issue. You should also avoid companies if you see the following red flags:
- Your point of contact is a salesperson: Some of the largest tax relief companies are driven by sales numbers rather than clients’ actual financial needs. If you meet with a sales representative for your consultation and they try to sell you on their services, that’s concerning. Your consultation should be a chance to ask questions, explain your situation, and learn about what the company brings to the table—not a free opportunity for a company to pummel you with sales tactics. In these companies, consumers are whisked quickly through the sales funnel and treated like a file number.
- You don’t know who will be handling your case: During your first consultation, you should be able to find out who will be working on your case if you choose that firm. If they can’t make any promises or just refer to “their team” in a vague way, your case may be handled by a team of overworked and underpaid tax professionals who are under enormous pressure to complete cases as quickly as possible. You deserve to know who will be handling your taxes and your financial future.
- You feel pressured to make an immediate decision: Choosing a tax relief firm is a major decision, and you should not have to make an on-the-spot decision in order to have a firm work with you. While they may encourage you to make a prompt decision to avoid missing IRS deadlines, you should never feel like you must decide immediately or lose your chance with a company.
- The company’s rep makes promises without understanding your situation: Experienced tax relief professionals can often predict if you’re going to qualify for a certain state or federal relief program, but they can only do so after learning about your situation. If the company’s reps promise that you’ll qualify for a certain program before they’ve understood your tax problem and your financial situation, that’s a red flag and a sign that you should look for another company.
- The company’s main selling point is its size: The largest tax relief firms aren’t always the best. They are often the largest because they spend the bulk of their budget on advertising, which allows them to be well-known among consumers. That leaves less money to hire experienced tax professionals. In many cases, a smaller firm that’s local to you can deliver the same—or better—results as well as a more personalized experience.
Questions to Ask During a Tax Relief Consultation
Take advantage of your tax relief consultation and use it to find the ideal company for your needs. Don’t be afraid to ask lots of questions; a legitimate tax relief firm will want you to be sure of your choice and be satisfied with the services they provide. Some of the questions you may want to ask include:
- How many cases similar to mine have you handled, and what types of outcomes have you seen?
- What is your fee structure, and what do you anticipate my case costing?
- Do you have any references from previous clients?
- How do you handle unexpected delays or problems with a tax case?
- Who will handle my case, and what type of contact will I have with them?
Don’t let your tax problems continue to overshadow your daily life. Relief is available—it’s just a matter of finding the right resources and services. We’re here to help you explore your options and find a solution that brings closure to your tax problems. Schedule a consultation at your convenience by calling us at 585-397-7785 or reaching out online.
This communication is Attorney Advertising. It is presented for informational purposes only and does not constitute legal advice. Every legal situation is different, and prior results do not guarantee a similar outcome. This communication does not create an attorney-client relationship between McLaud Law P.C. and the recipient.