The objective of the tax resolution financing company is to assist taxpayers with the tedious process of resolving past tax issues. Taxpayers often seek assistance after ignoring the situation for so long that the state or the IRS has decided to forcefully collect the unpaid taxes. This could take the form of a property tax lien or a bank levy. The most frequent way used by the IRS to seize the assets is through bank levy, in which the government files a levy on the taxpayer’s bank demanding to pay the taxes.
Hence, in resolving your taxes issues, one of the tasks of a tax resolution financing company is to eliminate the penalties. If a taxpayer has a valid reason for failing to pay taxes, the IRS and the majority of states will waive any associated penalties.
The warning signs that you are subject to levy…
Before a taxpayer may be levied, they must be notified of the action initiated towards them. The IRS will seek to reach taxpayers through written notices. These notifications may be disputed or appealed to avoid the tax’s imposition. And suppose the levy occurs and causes financial difficulties, or you engage in an installment arrangement (payment plan). In that case, you may have it released prior to the cash being withdrawn from your account. If these warnings are disregarded, the matter may progress to “collections,” where the designated agent or officer may contact the taxpayer by phone or in person.
Instead of ignoring these notifications, it is always preferable to cooperate with the taxation authorities and work with them to resolve the problem.
The Role Of A Tax Resolution Financing Company
When you ask for the assistance of a tax resolution financing company, you are employing them to examine the totality of your tax status and negotiate on your or your company’s behalf. A competent tax resolution agent will know precisely what is permissible on a financial disclosure as well as conduct an evaluation of your financial information to decide which resolution you would qualify for.
Most taxpayers may only be eligible for installment plans. Your agent should be able to arrange the lowest possible installments on your behalf by explaining that you cannot afford to pay more. The installment agreement amount may determine whether a company remains open or closes its doors.
The Cost Of Hiring A Tax Resolution Financing Company
Tax Resolution financing companies often work in two ways.
The first kind of tax resolution financing company will direct you to an unauthorized and inexperienced salesperson who will propose an assessment phase for which you will be charged thousands of dollars. After the assessment, you are required to pay a separate fee to resolve the problem.
The second one is the better approach; they will conduct an initial consultation if the agent who will represent the clients is licensed and competent enough to handle the issue with the IRS before any payment is made. The licensed consultant would ask you specific questions and evaluate your responses to determine what needs to be done. From there, you may expect charges ranging from a minimum of one thousand dollars with the simplest resolution approaches. You could reach about ten thousand dollars with the most complicated cases involving millions of dollars in liabilities. Before talking with a tax resolution financing professional, you must first verify if the person you are dealing with is authorized to represent before the IRS.
Communicating With Tax Authorities
Filing delinquent tax returns is the most challenging step. In order to file business tax returns for years that were not filed, your company must have well-documented financial information showing its revenue and expenses. Unfortunately, a lot of companies do not have accurate monthly or yearly financial records that reflect their income and expenditures. Without this data, companies could become helpless because they do not know where to begin compiling years of financial records, which could be tedious.
If the basic financial data is lacking, it would be very difficult or even impossible to complete an accurate return. And when the return is made based on guesswork, your risk of an audit, penalties, and fines will significantly increase.
To be able to file back taxes, you will need to do historical bookkeeping if you are working to fix unfiled tax returns. When you doubt completing this task by yourself, it is highly recommended to hire a tax resolution financing company. Their staff of historical bookkeepers will organize your company’s financial records, enabling you to complete tax returns that correctly account for all expenditures made. If all expenses are accounted for, then your tax preparer would easily account for even a single cent you spent, which will minimize your company’s tax liability.
“Current and Compliant”
A taxpayer who is “current and compliant” has filed all previous tax returns. In order to preserve an installment arrangement, a taxpayer must comply with all filing requirements. The installment agreement may be canceled if scheduled payroll deposits, projected payments from self-employment, or any taxes are not paid on time. Filing all missing tax returns and avoiding the accumulation of further taxes are the most crucial aspects of settling delinquent taxes and may also be the most complicated part for any company.
After all tax returns have been filed, and the full scope of the tax liability has been determined, then you are on your way to solving your tax issue. The next task in attaining a resolution is assessing whether your company could settle what is required to pay. In order to achieve this determination, the state or the IRS would need the taxpayer to provide accurate financial disclosure of the income, expenses, assets, and liabilities.
In tax resolution, your financial disclosure will serve as your weapon. Unfortunately, the procedure is so hard to comply with, and because of that, a lot of taxpayers cannot continue without assistance. Those who are having difficulty resolving their tax liability might benefit from the services of tax resolution financing companies.
