Tax Resolution & Dealing With IRS
Tax resolution is one of the most heavily marketed and misunderstood services within the tax preparation industry. The most common situations that demand tax resolution occur when taxpayers still owe the IRS from a previously filed return or when people have failed to file a tax return. Tax Resolution is the process of addressing outstanding issues that will clear the slate and get people back into the good graces of the IRS.
Basically, tax resolution is the umbrella term for services that aid taxpayers when they run afoul of the IRS or any state tax agency. The Trucker CFO Team has seen all kinds of Tax Resolution issues over the years from common mishaps to situations stranger than fiction, but none of them have been beyond help.
Trucker CFO offers effective strategies for addressing your tax resolution needs. First, we start with a free and comprehensive evaluation of your individual and business tax problems. Based on that evaluation, we will determine the next course of action. The fees you pay will be determined by and dependent on the scope of your tax issues and the predetermined course of action. We invite you to listen to our podcast on Trucker CFO's approach to tax resolution.
Our Trucker CFO Tax Resolution Process
We provide you with a one-hour consultation to discuss your issues with our Tax Resolution Team. During this no-obligation consultation, we’ll explore your case and explain the process.
Our Tax Resolution Team will serve as your legal representative in your case, and you will no longer have to speak to the IRS. We'll communicate with the IRS to determine your options.
We'll work to establish IRS compliance by filing any unfiled tax returns and entering you into a qualifying settlement program. We will help you select the settlement plan that best fits your tax situation.
Your case will be closed, and your tax nightmare will be over. Our team will work with you to establish a plan that will help you stay compliant with the IRS and state tax agencies going forward.
Common Tax Resolution Actions
Having unfiled returns is not a situation to take lightly. The fact is that failing to file your tax returns is a criminal offense. If you do not file, you can be prosecuted and punished, which can include time behind bars. The sentencing guidelines for failure to file are one year for each year not filed. You should never put your freedom on the line over failing to file your tax returns.
Trucker CFO has helped thousands of professional truck drivers resolve their tax issues by filing delinquent tax returns. Let us give you peace of mind by helping you get into compliance with the filing requirements. If you voluntarily file your delinquent returns, you’ll likely avoid further problems other than having to pay the interest and penalties.
If you wait for the IRS or your state of residence to file your returns for you (with a Substitute for Return or SFR), those returns will be prepared in the best interest of the government. The IRS will not include exemptions, deductions, or credits that could reduce the tax amount.
In most cases, you will likely owe taxes, interest and penalties after the returns are filed. Once we see how much is owed, we’ll design a plan of action to resolve that, too.
Under an installment agreement, the taxpayer agrees to pay the entire amount of their debt in monthly installments over a period of up to six years. This method allows the taxpayer to pay in small, manageable amounts so that the debt is not overwhelming. For total tax balance amounts under $50,000, our Trucker CFO team works to position our clients with a streamlined and guaranteed instalment agreement. For amounts over $50,000, additional financial disclosures are required.
Partial Payment Installment Agreement
A partial payment installment agreement, or PPIA, is an installment agreement that doesn’t have to be settled in full due to a combination of the statute of limitations and the taxpayer’s ability to pay means that the tax debt.
The statute of limitations (CSED) prohibits the IRS from attempting to collect on a given tax debt indefinitely, regardless of a taxpayer’s ability to pay. This is typically 10 years from the date the tax was assessed, although there are numerous actions that can extend the CSED. Once the CSED has passed, the IRS can no longer legally collect the taxes in question, and the debt is effectively forgiven.
Inevitably, some taxpayers are unable to fully pay off their tax debt before the collections statute expires. Still, the IRS recognizes that partial payment is better than no payment, so they encourage taxpayers to pay as much as they are able until the collection date has expired. The result is an PPIA.
Offer In Compromise (OIC)
An offer in compromise (OIC) is an option offered by the IRS that allows a taxpayer to settle their debt for less than what is owed. This option is great for a taxpayer because it gives them a fresh start with the IRS. The goal of an offer in compromise is to come to a legal agreement for payment that’s in the best interest of both the taxpayer and the IRS.
The three reasons for submitting an offer in compromise are doubt as to collectability, doubt as to liability and effective tax administration.
First-Time Penalty Abatement
First-time penalty abatement, or FTA, is essentially a one-time, get-out-of-jail-free card of sorts for abating certain penalties. The abatement is intended for taxpayers who are typically on top of their taxes, but, for a variety of reasons, life hit them broadside and they fell behind one year.
If the taxpayer meets the specific set of qualifications, they are eligible for the abatement. However, because FTA is a one-time option, you may want to look at a few other options prior to taking this particular road.
Reasonable Cause Penalty Abatement
When you come to the IRS and invoke Reasonable Cause to get a penalty abatement, we are essentially saying the taxpayer has a really good excuse for whatever behavior it was that led to their tax penalty. Because Reasonable Cause situations are often multifaceted and complex, Reasonable Cause can’t be quantified in the same way as FTA. However, this also means we have much more room to work when trying to use Reasonable Cause in order to get penalties abated.
There are dozens of scenarios that can qualify as Reasonable Cause, including death, serious injury or unavoidable absence. A Reasonable Cause can often overlap, allowing you to cite more than one at a time.
By issuing a lien, the IRS is asserting a legal right to a taxpayer’s property as a security against debt the taxpayer who owes to the IRS. Essentially, the IRS is stating their claim on the taxpayer’s assets. That claim, if left unchecked, will eventually end with the IRS seizing the taxpayer’s assets, namely bank accounts, valuables, real assets with equity to fulfill the outstanding tax debt. The purpose of issuing a lien is to inform other creditors that the IRS now has legal right to the taxpayer’s property.
When a lien is released, your assets are no longer encumbered and subject to seizure by the IRS. A lien release gets rid of most of the immediate effects of a lien. Because the IRS no longer has any interest in the assets, the taxpayer may sell or transfer their assets at will. The IRS will release a lien 30 days after the tax debt has either been satisfied or it becomes legally unenforceable. The IRS is also legally obligated to release a lien if the tax debt has been discharged in bankruptcy or if the statute of limitations (CSED) has expired for the collection of the tax debt.
While a lean release is an acceptable solution, a release does not solve all the problems created by a lien. Most notably, a lien release does not address damages done to your ability to obtain credit.
A lien withdrawal actually erases the lien as though it had never existed, allowing a path for restoration of the taxpayer’s credit score to pre-lien status.
Let Trucker CFO Help You With Tax Resolution
Are you in a situation where you currently have a tax balance with the IRS or a state tax agency? Have you failed to file your federal or state tax returns in previous years? The IRS has begun ramping up enforcement for those people who owe tax balances and for those people who have failed to file their returns. Now is the time to get your outstanding tax issues resolved, and our highly experienced Trucker CFO Tax Resolution Team can help you.
If you are in need of tax resolution assistance, please call us at 800-533-4230 or schedule a free consultation with the Trucker CFO Tax Resolution Team. You can ask us any question that comes to mind regarding tax resolution and your particular situation. We will be glad to explore your specific needs and our team will work with you on taking the first step toward finding the best tax resolution strategy.