What Are Your Options During A Tax Dispute?
A tax dispute occurs when the IRS and/or a state department of revenue or taxation claims that you owe taxes. A dispute can occur whether you forgot, failed or refused to file tax returns and/or you did not pay taxes when due. The most common ways to resolve owed taxes are to:
- Pay them in full
- Pay them in part (i.e., an offer in compromise)
- Pay them over time (i.e., an installment agreement)
- Dispute them by filing a tax court petition or requesting an appeal
The IRS and state government tax departments can use various collection efforts such as bank levies, wage garnishments and tax liens to collect unpaid taxes. In many instances, you can halt aggressive collection efforts by reaching out to them and requesting a hold so that back tax returns can be prepared and filed.
If the IRS or a state tax department is unsure about your tax return or other items, it will likely issue an audit notification letter. These notices have specific time deadlines. Usually, an in-person meeting is required to resolve the audit. The best way to resolve these is to have the most competent, professional advice and representation on your side
Eligibility For An Offer In Compromise
An offer in compromise is simply an agreement between you and the IRS or state government to pay an amount less than what you owe. You must meet strict requirements and parameters before an offer in compromise can be successfully submitted and accepted. Not only must you file all back tax returns, but you must demonstrate that:
- Full payment of your taxes would create an economic hardship
- You have unusual expenses
- Your income was reduced due to unforeseen circumstances
- You have little to no assets or equity
Can You Prevent Tax Avoidance Penalties?
In most cases, interest and penalties accrue and become a significant portion of the amount due. Many penalties can be eliminated or reduced if you take certain steps and there was a legitimate reason for the failure or delay in payment. The most commonly accepted reasons to justify avoiding a penalty are:
- Reliance on a tax professional
- Natural disaster,
- Significant financial hardship
- A death in the family
Attorney-CPA Marc L. Edwards knows the ins and outs of tax law. We will provide excellent advice and representation that is rooted in over 25 years of experience.
Contact Us For A Free Consultation
Reach us at 818-344-8200 or through email to schedule a free consultation with Marc L. Edwards. We are happy to discuss your situation.