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Gaining A Positive Income Tax Resolution
Doug Smith

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One of the best ways to solve a taxation dispute with the Internal Revenue Service is to enter into the tax resolution process. To begin the IRS resolution process, it is best to hire professional help, such as a Certified Public Accountant (CPA), a tax attorney, or similar tax professional to argue on your behalf. The IRS has developed many financial tools to assist in resolving disputes, depending on the severity of the complaint. In cases of severe negligence, such as tax fraud or attempts to defraud the tax code system, the IRS may simply resolve the dispute by seizing all assets of the plaintiff, such as homes, cars, properties, bank accounts, and so on.

If your argument with the IRS is not that severe, there are less severe measures that your tax professional can help you reach, such as garnishing your wages, penalty abatements, offers in compromise or offers in lieu, and examination of extenuating circumstances. If the previous sentence sounded like gibberish to you, hire a professional taxation resolution specialist to help.

First, offering to work with the IRS to repay some or all of your delinquent taxes can help prevent them from unilaterally seizing all your assets. Instead, you would prefer to reach a resolution of your tax dispute that allows you to keep most of your property and income, and hopefully repay the government over a long period of time. Sometimes the Internal Revenue Service can reduce the amount of taxes past due, allowing you to repay a smaller amount. The ability to settle disputes this way depends on the circumstances and your cooperation.

An Offer In Compromise is one of the IRS dispute resolving methods for settling your dispute for much less than you owe. The goal of the IRS is to collect taxes. They would rather have a good chance of recovering some of the money you owe them, rather than having zero chance of recovering all of it. If your financial circumstances warrant this way of resolving the tax dispute, you will need a tax professional in negotiating these kinds of debt resolutions.

Your CPA or tax attorney might be able to immediately resolve and remove issues like wage garnishments or property seizures, with the understanding that an alternative resolution to your tax dilemma will be negotiated later. We all get into financial difficulty at some time, and shouldn't be punished for circumstances beyond our control. A willingness to cooperate with the IRS to repay some or all of the unpaid taxes should assist you in obtaining a resolution that is less severe to your lifestyle and bank account.

One effective resolution for delinquent taxes is repayment via an installment program. You simply repay the IRS in small monthly installments until the debt is repaid. This allows the Revenue Service to collect their money, and allows the taxpayer to have a less severe impact on his budget. Sometimes a tax payer simply has no resources to pay the taxes owed, and is deemed Currently Not Collectible. Once the taxpayer provides documentation to be declared Currently Not Collectible, the IRS (hopefully) stops levies, garnishments, and other collection activities. However, the IRS will send the citizen a friendly annual reminder of the amount still owed.

Notice that the designation is "Currently" not collectible. The IRS will try for 10 years (the current statute of limitations, subject to change) to collect the debt. If the owed taxes cannot be collected within that period, the resolution is simply that the tax debt will expire. The IRS spends time and money on trying to resolve and collect back taxes, and perhaps after 10 years there is little financial incentive to continue the collection process.

It is estimated that there are billions of dollars of outstanding tax debts the IRS is trying to recover. They will try to recover as much as they can, and so all serious offers of repayment will be considered. If you have an experienced tax consultant, your tax resolution process can result in a settlement that is fair to all.

Copyright 2008 by Doug Smith.  All Rights Reserved Worldwide.  Unauthorized Duplication Prohibited.  Not Intended to be Professional Advice.

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