Taxpayers should not ignore their past due tax debts.

Many taxpayers have either entered into an agreement with the IRS to pay their tax debts and have failed to honor the agreement or have completely disregarded IRS notices for payments. A taxpayer should not ignore a tax debt whether it is owed to a state Department of Revenue or to the Internal Revenue Service. The Internal Revenue Service collection activities are in effect. Notices of Levy that have not been much enforced because of the pandemic will soon be enforced around the summer. Therefore, taxpayers facing economic hardship should explore their option to either honor their agreement or to request a modification of their agreement.

Some taxpayers are misled to believe that whoever prepared their tax return could represent them when they face tax problems. Un-enrolled tax preparers and accountants CANNOT LEGALLY represent taxpayers before the IRS. Only enrolled agents, CPAs, and attorneys can represent taxpayers at all levels before the Internal Revenue Service. A tax preparer or an accountant could assist a taxpayer before a customer service personnel of the IRS on a tax return they prepared when they passed a test and registered for the tax period. However, when a case is forwarded to collections and other departments, a licensed tax professional is required

Only credentialed and licensed tax professionals have access to the IRS Tax Practitioners Priority Line phone number. Practice before the IRS is regulated by circular 230.

The IRS has several means available to enforce tax filing compliance and payments of tax and penalty due. You must answer to correspondence from the IRS when an action is required.

Do not not ignore any letter. There are many ways to resolve a tax debt. However, a taxpayer needs to be in compliance for the past 6 years to obtain an abatement, an installment agreement, an offer in compromise from the IRS.

  • Some taxpayers could be qualified for an abatement in whole or for a part of the tax liability or penalty.
  • Taxpayers who owe $50,000 or less may not have to file Form 9465 to request an installment agreement.
  • There are cases where taxpayers could apply for an offer in compromise.

An offer in compromise is an agreement between a taxpayer and the Internal Revenue Service that settles a taxpayer’s tax liabilities for less than the full amount owed. Most offer in compromise are rejected. It is a very long process and it is not suitable to every taxpayer. A taxpayer unique facts and circumstances are taken into account to qualify. The IRS will look at the taxpayer’s ability to pay, income, expenses, and asset equity.

Taxpayers might not be able to obtain a passport or to travel when they owe the IRS over $50,000 because under current law, enacted in 2015, this is information could be reported to the Department of State.

Do not ignore a tax debt, regardless of your financial situation. Seek the guidance of a tax professional who is qualified to represent you before the state Department of Revenue or the Internal Revenue Service.

Do you know that you could reduce your tax liability by proper tax planning strategy as individual or business owner?

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