- December 31st, 2012
- John Dillard
- IRS Representation, Back Taxes, Offer in Compromise, IRS Tax Problems, Tax Advocacy
For those taxpayers who have not filed their tax returns for the past several years the filing of these old back returns is often the easiest and quickest way to assess the obligations and correct the records of IRS tax assessments/calculations. In the review of past taxes that were either filed or assessed by the IRS, a CPA can learn of missed deductions and to legally amend past filed tax returns. This is one of the first and most important steps in the tax review process to ensure that our tax obligations to the IRS include only monies that are legally owed and do not include any tax bill amounts that are not legally owed. Our tax system expects taxpayers to pay only what they owe and it is up to CPA’s and their clients to ensure that only their just tax amounts are listed as due and payable.
Installment agreements, though frequently encouraged by the IRS, are financially problematic as though collection efforts stop while an Installment Plan is in full force and effect, as a result of a written agreement with the IRS and timely payments by the taxpayer. However it is also during this time that payments are being made during the payment period that penalties and interest continue to be accrued. Accordingly there are frequently financial and strategic options. such as:
- Payment of the tax and interest in full. If you can do this and have valid reasons or explanations as to why the monies are in arrears, the IRS will abate assessed penalties. This frequently is not only the least expensive option but also much faster than the submission of an Offer in Compromise and the limitations of qualification thereof. To read more about this process and how we saved one client $120,000 visit http://www.hiscpa.com/blog/2009/06/27/atlanta-cpa-saves-metro-atlanta-client-120000-in-payroll-tax-penalties/
- Offer in Compromise. If you qualify the IRS will reduce your tax bill to a combination of your net worth and your “excess cash flows” over the next five years. Though this is an arborous process, frequently tens of thousands of dollars of taxes, penalties and interest are reduced to a settlement amount that is literally pennies on the dollar. To discover if you qualify visit http://www.hiscpa.com/offer-in-compromise.html
- A Review of Old Filed Tax Returns. Frequently I have worked with taxpayers to determine that original returns were either not filed, filed incorrectly or that valid deductions were originally left off the filed returns. This alone is perhaps the largest single determining factor in the errant calculation by a taxpayer of the true amounts owed.
Representing yourself before the IRS is a recipe for disaster and is analogous to the saying that “He who represents himself has a fool for a client. As Believers we are called to surround ourselves with wise counsel and failing to do so will add folly, toil, and additional financial drain, helping our “financial ship” sink faster still. Sitting down with a CPA who is well versed in tax representation issues is your best first step to getting back tax issues, payments and returns filed and paid. Finding the right solution to your tax problem helps resolve tax problems better and faster. Though an Installment Agreement is often the most convenient it often results in both prolonging the problem and the largest financial outlay.
To learn more about IRS/Tax Representation Issues and an Offer in Compromise visit http://www.hiscpa.com/irs-representation.html
Proverbs 3:5 Trust in the LORD with all your heart and lean not on your own understanding;
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