Tax Resolution: The Internal Revenue Service (IRS) is a government body in the US that handles federal tax collection. It ensures every eligible US citizen understands the tax laws and pays their taxes on time. If someone doesn’t pay their tax, the IRS has the legal authority to seize the assets of the individual. This is a terrible situation. Thankfully, tax resolution services can help you. But what is tax resolution, and how does it work? Find the answers below!
Tax resolution is what a tax resolution company would do for you. They will contact the IRS officials and handle the case so that your bank assets aren’t seized. This is required when you haven’t paid federal taxes in a long time. These taxes accumulate into huge debts that the IRS department retrieves by freezing your bank account or seizing the property. These valuables are then no longer in your possession. The tax authorities can use them to pay the taxes due. So, tax resolution is mandatory in this scenario.
Tax resolution agencies have professionals who are experienced in dealing with the IRS. They will first assess your financial situation as well as your tax history. Depending on this data, they will negotiate with the IRS to lower your debt payment.
Now, this can be done in several ways. The IRS may allow you to pay back in installments. Since your tax resolution representative would negotiate, you will get the lowest possible installments. However, if that’s not possible, the IRS may allow a partial payment agreement. You would be given time periods during which you will have to pay back a certain amount. These periods will stretch for years.
The only problem is that the IRS will monitor your financial condition after every 2 years. If you have improved, the installment will be increased. But if you haven’t, the IRS will keep the amount the same or even erase the debt.
Another solution that your tax resolution representative can propose is a Currently Not Collectible status. This is for people who don’t earn enough to cover their expenses. This way, the IRS cancels the debt and suspends tax collection until the financial situation improves.
The IRS never takes this huge step spontaneously. Typically, it will send you notices and reminders. It will also contact you through all means to tell you about the due taxes and their consequences.
Once you’ve become totally unreachable, the IRS department will get in touch with your bank. It will also send IRS officers to your residence. After that, the tax service collects the funds (takes the property) or freezes the bank account. At this stage, nothing can be done to save your valuables.
So, when you receive the first notice of unpaid taxes, don’t ignore it. Be on the lookout and find a company that deals with tax issues immediately. Delaying the matter will only increase the risk of levy!