Taxpayers should not ignore their past due tax debts. There are options to pay.
Many taxpayers have either entered into an agreement with the Internal Revenue Service to pay their tax debts. In some cases, they have failed to honor the agreement or have completely disregarded IRS notices for payments because of certain circumstances. Taxpayer should not ignore a tax debt whether it is owed to the Internal Revenue Service or to a state Department of Revenue. Taxpayers are advised to request a modification of the agreement when they face a financial hardship that cause them to not being able to fulfill their agreement. The IRS could be very lenient in a request to amend the 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 Internal Revenue Service. Only enrolled agents, certified public accountants (CPAs), and attorneys can represent taxpayers at all levels before the Internal Revenue Service. Most attorneys and CPAs who do not specialize in taxes do not take tax cases. Tax representation is a specialty in the tax field.
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. Tax representation is a specialty in the tax field.
Do not be among taxpayers who get in deeper problems with the Internal Revenue Service by expecting their unlicensed tax preparers to resolve their tax problems. Only credentialed and licensed tax professionals have access to the Internal Revenue Service Tax Practitioners Priority Line phone number.
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 within 30 days when an action is required. Do not not ignore any correspondence!
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 could qualify for currently not collectible (CNC) status based on financial circumstances.
- 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. 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.
A taxpayer might not be able to obtain a passport or to travel when he or she owes over $50,000 because under current law, enacted in 2015, this is information is 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.
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