TAX RESOLUTION PROCESS
If you are facing an IRS problem, Tax Muscle can take you from tax debt to tax resolution in the following 3 steps:
- In order to determine the best tax debt resolution option for you, we must first conduct a thorough tax debt investigation of your financial situation.
- After concluding our tax debt investigation, our Tax Attorneys and Enrolled Agents will be able to construct the most favorable tax resolution plan for your individual circumstances.
- With your tax resolution plan fully structured, we can put it into motion. Tax Muscle will negotiate the most favorable resolution plan for you with the IRS and/or State Taxing Agency and submit that plan for approval.
Tax Muscle will file a Power of Attorney (Form 2848) with the IRS, which will allow us to assume all tax communications and negotiate resolution options with the IRS on your behalf without the need for you to be present or speak directly to the IRS. While working toward your final resolution plan, our tax experts will take prompt intermediary relief actions to stop wage garnishments, release federal tax liens, prevent levies, and halt any other forceful IRS collection efforts.
Our Tax Resolution Services Include:
Offers in Compromise
Non Collectible Status
Appeals of IRS Collection
IRS Audit Representation
State Tax Representation
We have several potential options available to resolve your tax problem.
Offer in Compromise (OIC): An OIC allows you to settle your tax debt for less than the full amount that you owe. It may be a legitimate option if you either cannot pay your full tax liability or doing so would create a financial hardship. The IRS will generally approve an offer in compromise when the amount offered represents the most that they can expect to collect within a reasonable period of time (usually 5-24 months). Although it requires a lengthy and onerous process, the approval of an OIC is an immensely beneficial tax resolution. When making its determination on your OIC, the IRS will consider the following set of unique facts and circumstances: Ability to pay; Income; Expenses; and Asset equity. Our task is to compile a thorough financial analysis on you to determine the exact amount to offer the IRS in order for your OIC to be approved.
Installment Agreement (IA): An Installment Agreement allows you to pay your full debt in smaller, more manageable amounts. Installment Agreements generally require equal monthly payments. The amount of your installment payments and the number you make will be based on the amount that you owe and your ability to pay that amount within the time that the IRS can legally collect payment from you.
Streamline Installment Agreement (SIA): A taxpayer may enter into an SIA when they have a balance due of less than $50,000 and can fully pay their debt within 72 months or prior to the Collection Statute Expiration Date, whichever is earlier. This type of agreement generally does not require a financial statement, but a limited amount of financial information may be required in the application process. Taxpayers who qualify for an SIA must be compliant with all filing and payment requirements, and those with a balance of $25,001 to $50,000 must also enroll in a Direct Debit Installment Agreement.
Conditional Expense IA: This type of agreement can be used when a taxpayer has expenses that fall outside the scope of what the IRS typically allows, but is still able to fully pay the liability plus projected accruals within five years. If the liability plus accruals can be paid within five years, the IRS may deem it appropriate to allow the taxpayer the conditional expenses. If the taxpayer cannot pay within five years, the IRS may still deem it appropriate to allow the taxpayer the conditional expenses for up to one year in order to modify or eliminate the expense. A financial statement is required for this type of agreement so that the taxpayer can provide proof of their conditional expenses.
Stair-Step IA: A stair-step installment agreement is a 60 month payment arrangement whereby the taxpayer makes a lower fixed payment for a period of 12 months before stepping up to a higher payment for the remaining 48 months of the agreement. The taxpayer is required to fully pay the tax debt within this 60 month period. Stair-step installment agreements are typically used when the taxpayer is close to paying off an expense such as a car loan, mortgage, medical bill, student loan, etc.
Traditional IA: The Traditional Installment Agreement is a full pay arrangement requiring the taxpayer to pay as much as possible, as dictated by the facts and circumstances represented in the financial statements of the taxpayer.
Partial Pay Installment Agreement (PPIA): Implemented in 2005, the Partial Payment Installment Agreement (PPIA) allows the IRS to enter into installment agreements that result in only partial payment of the tax liability. Prior to the enactment of this legislation, taxpayers could only enter into an agreement with the IRS if it resulted in full payment of the liability. This type of agreement can offer savings comparable to the OIC; however, the taxpayer must remain on the installment agreement until the collection statute expires. Taxpayers who are being considered for a PPIA must provide complete and accurate financial information that will be reviewed and verified. Taxpayers will also be required to address equity in assets that can be utilized to reduce or fully pay the amount of the outstanding liability. In addition, taxpayers granted PPIA's will be subject to a subsequent financial review every two years. As a result of this review, the amount of the installment payments could increase or the agreement could be terminated if the taxpayer's financial condition improves.
Currently Non Collectible (CNC): Proposal of Currently Not Collectible (CNC) status is a tax resolution method used to prevent the IRS from employing any forceful collection action against a taxpayer. In order to qualify for CNC status, the taxpayer must supply complete financial disclosure to the IRS, and if such disclosure substantiates that the taxpayer's allowable monthly expenses exceed their monthly gross income, then the IRS will conclude that the taxpayer is suffering an economic hardship. Assuming that the taxpayer stays in compliance and that their income remains at the same level as when the CNC proposal was initially approved, the taxpayer can remain in CNC status until the expiration of the collection statute.
Penalty Abatement (PA): We can successfully petition the IRS to alleviate a portion of the penalties assessed against you if we can demonstrate the following two essential elements: 1) reasonable cause for the noncompliance, and 2) due diligence on your part to resolve the tax debt. A proposal for penalty abatement requests that the IRS eliminate the failure to file and failure to pay penalties from your tax account. In order to reconstruct the conditions behind which they were assessed against you, we will formulate a detailed petition in our request for abatement of your penalties.
As the services and descriptions outlined above are not all-inclusive, you can refer to our list of tax resolution services contained in the services menu to learn about other alternatives that Tax Muscle can facilitate to resolve your tax problem and offer you freedom from tax debt.
Every Taxpayer Has A Right To Tax Representation
If you have been contacted by the IRS or State Taxing Agency, or are facing enforced collection action or the threat of such action, then let Tax Muscle do the heavy lifting and resolve your tax problem for good. Call 855.829.6875 today for your free 15 minute tax debt consultation.