Tax Resolution Services 101: How They Help and What to Expect


Are you among the millions of Americans with tax problems? Recent economic conditions have made paying taxes even more difficult for many people.

Don't let your tax issues get worse by putting them off. Tax resolution services can help you deal with your tax problems. You can end the stress of trying to deal with the IRS by yourself.

Learn more about tax resolution services and what they can do for you.

Do I Need Tax Resolution Services?

Problems with the IRS or a state tax agency won't go away on their own. A tax resolution specialist can help if you have tax problems like:

  • An audit

  • Unfiled back tax returns

  • Unpaid back taxes

  • IRS liens or levies

  • Wage garnishment

Tax resolution services can help whether these problems apply to your personal or business tax returns.

Some people worry that using tax resolution services makes them appear guilty. This isn't the case.

The IRS Taxpayer Bill of Rights gives all taxpayers the right to retain an authorized representative. You can choose your authorized representative.

Benefits of Tax Resolution Services

Working with a tax resolution specialist can give you several advantages. Tax resolution professionals know the best ways to protect your rights, income, and assets. They handle IRS problems every day and know how to navigate the process.

Tax resolution specialists have an in-depth knowledge of the tax code. They understand IRS policies and procedures, which they can use to your advantage.

Tax resolution professionals know how to get you the best possible settlement terms. They know the possible options and will pursue a deal that is the most in your favor.

Another benefit of using tax resolution services is that you don't have to deal directly with the IRS. Your representative will communicate with the IRS on your behalf.

Finally, tax resolution services may be able to resolve your tax problems more quickly. The sooner you find a solution to your tax issues, the sooner you can put a stop to threats, fines, and penalties from the IRS.

Who Can Provide Tax Resolution Services?

Only certain people are allowed to represent taxpayers before the IRS. Authorized representatives include:

  • Attorneys

  • Certified Public Accountants (CPAs)

  • Enrolled agents

An enrolled agent is someone who has either passed a comprehensive three-part exam covering individual and business tax returns or who has extensive experience as a former IRS employee.

You'll give your representative limited power of attorney. This lets your representative speak directly to the IRS on your behalf.

What to Expect from the Tax Resolution Process

The tax resolution specialist you choose to work with will guide you through the resolution process. These are the steps you can expect.

Consultation to Evaluate Your Situation

The first step when you decide to use tax resolution services is a consultation. You can explain the problem you're having, and the tax professional will assess your tax and financial situation. The consultation should give you enough information to decide if you'll benefit from the tax professional's services.

Many tax resolution professionals specialize in issues involving the IRS. If you have state tax issues, be sure to ask about the firm's experience with that state's tax agency.

Investigation and Compliance Check

To continue the resolution process, you'll need to sign a Tax Authorization Information Form 8821. Form 8821 lets a licensed tax professional get a complete record of your tax account.

You usually won't be able to reach an agreement with the IRS until you file all past tax returns. This is why your tax resolution specialist needs to know your full tax compliance situation. Once you become current and compliant with all your returns filed, your tax professional can start looking for the most practical tax relief solution.

Tax Resolution and Settlement

The resolution phase starts with gathering more detailed financial information and documentation. The IRS will ask you to submit a financial disclosure so they can evaluate your ability to pay what you owe. You'll need to disclose your assets, liabilities, income, and expenses.

This disclosure is critical for getting the best possible resolution. Your tax resolution specialist will help ensure that it's completed accurately.

Next, your representative will prepare a thorough proposal to submit to the IRS. The goal is to balance what the IRS will accept with your budget.

You'll need to sign a Limited Power of Attorney Form 2848. Limited power of attorney lets your tax resolution specialist speak directly to the IRS on your behalf. Your representative acts as the mediator between you and the IRS throughout the negotiation process.

Settlement Approval and Full Compliance

When the IRS approves the proposal, you'll make the required payment(s). You must stay in compliance with tax filings and payments for the next five years. Your tax professional can give you tips on how to avoid future tax problems.

Types of Tax Resolution Solutions

The IRS can be intimidating, but they offer several programs designed to help taxpayers meet their obligations. Some of these solutions can reduce the amount you owe if you qualify.

Offer in Compromise

An offer in compromise is a settlement where you don't have to pay the full amount you owe. The IRS forgives the remaining debt. You must prove that you can't pay the total amount without financial hardship.

An offer in compromise can be a significant benefit to you. However, the IRS rejects most proposals. They have to decide that your offer is equal to or greater than the amount they would otherwise be able to collect.

Installment Agreement

An installment agreement is a payment plan. With most agreements, you make monthly payments to pay off the full amount you owe. You may qualify for an agreement where you make payments on part of the balance, though.

Currently Non-Collectible

You can get a temporary hold on collections if you qualify for currently non-collectible status. You have to prove that paying the tax would cause financial hardship. The IRS will check your financial situation later to see if your situation has changed.

Other Tax Resolution Solutions

Other examples of tax resolution agreements are:

  • Innocent spouse relief

  • Injured spouse relief

  • Penalty abatement

  • Tax-related identity theft victim assistance

Using tax resolution services will help you apply for the solution that best fits your situation.

Finding the Best Tax Resolution Services

Tax resolution services can bring you many benefits if you're facing penalties and fines from tax problems. You need to be sure you're using the best representation, though. You want a trustworthy firm with the experience to get you the best possible results.

Katie Lawson PLLC has years of experience in resolving tax problems for our clients. We'll give you an honest assessment of your case. You can count on us to give you the high-quality legal services you expect with the empathy you deserve.

Schedule a free consultation today. Let's start the process to resolve your tax issues.