Don't Overpay Tax Resolution Companies
Resolving your tax debt is not always an easy task and in
some cases requires help from a tax professional. Tax
debt resolution services can be pretty expensive, which
often increases financial burden on a struggling taxpayer.
This article provides a few tips of how to resolve your tax
debt for less money.
The rule of thumb in
any tax resolution is
to show compliance.
In other words, the
IRS wants you to file
all missing returns
and to stop falling
behind on tax
payments. Until you
comply with these
nobody can really
help you to settle your tax debt. In some cases it might be
possible to buy you some time without enforced collection
IRS activity, even if you have not met these requirements,
but just for a limited amount of time. If you really want your
tax debt to be resolved, you need to file all missing returns
and find a way to stay current with all new tax obligations.
If you decided to hire a tax representative to take care of
your debt, it is a good idea to have all missing returns filed
before you pay your retainer. Bear in mind that the IRS
usually takes from six to eight weeks to process filed
returns. In some cases you might need to contact the IRS
office assigned to your case and inform them that you
recently filed returns. If the IRS representative does not
place a hold on enforced collections to allow sufficient time
for processing of your returns, you can request it yourself.
The next step is to make a decision of which company to
use. Checking the company's BBB rating, calling
references and reviewing a list of the company's resolved
cases are the best ways to make a decision. Many
companies also provide free consultations, which is also a
good way to determine whether or not this particular tax
representative satisfies your requirements.
After you have made a choice and paid your tax
representative to settle your tax debt with the IRS or a
State Department of Revenue, you will be supplied with a
number of documents and a deadline to have them
completed. It is important to understand that the IRS
makes its decision about your proposal based on your
financial situation. If you do not provide any documents to
support your case, your tax representative will have
difficulties negotiating with the IRS on your behalf.
The best way to save your money is not to make your tax
resolution specialist send you numerous letters reminding
you about financial information you need to provide. Try to
respond to all requests for financial documents on time
and provide all required information. Do not be afraid to
disclose more information than necessary. Your tax
representative will review the documents you provided and
make a decision on what needs to be sent to the taxing
authorities to support your proposal.
Another way to save you lots of money and avoid stressful
conversations with the IRS and your tax representative is
to stop falling behind on taxes. You should remember that
any new tax liability results with an automatic default of
your existing repayment agreement with the IRS or State
Department of Revenue.