How to Resolve Tax Problems with The IRS – 5 Tips

How to Resolve Tax Problems with The IRS – 5 Tips

March 29, 2023 0 By Maria

Tax problems like audit, tax debt, collection actions and others, can give you sleepless nights. Here are tips to help you resolve tax issues.

At one time or the other, you will have to deal with IRS for not clearing your tax debt or any other tax issue. Tax issues can be complicated, and can lead to tax debt growth and even enforcement collection actions such as asset seizure and wage garnishments. For that reason, it is advisable to address the tax problems as soon as you are notified by the IRS.

Common tax problems you can face

Taxes are complicated and you can face tax problems at one time or the other. One of the main tax problems you can face is a tax debt. If you have a tax debt and don’t pay it on time, the debt will accrue penalties and interests. Another tax issue you can face is tax evasion and that can land you in jail or pay heavy fines if found guilty. Other tax problems can be failing to file your tax returns, over reporting business expenses, under reporting your income, collection actions like asset seizure, among others. Here are 5 tips to help you resolve common tax issues.

1*  Clear your tax debt (if you can)

The main tax issue that can make your life a living hell is owing the IRS. The IRS will not come after your when you clear your tax debt. However, if you receive a tax notice from the IRS and don’t respond by paying or contacting them, you can be fined and interests added to your tax bill. This will increase your overall tax debt, and that is not a good thing. Therefore, if you can pay the tax debt in full, do it, and complain later. This will protect you from heavy fines and interests.

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2*  File for an installment agreement payment plan

After receiving a tax notice from the IRS, don’t go silent. Many taxpayers go silent after noticing that the tax debt is too high and they can’t pay it at once. This is a big mistake. Be a smart taxpayer by filing an installment agreement payment plan with the IRS. The IRS wants you to pay the debt based on your financial situation; even if it takes you years to clear the tax debt. Make sure that what you put on the agreement you can afford it. Then, honor the agreement by paying what you promised. This also ensures your tax debt doesn’t increase as a result of added penalties and interests.

3*  Contact the IRS for more information and guidance

When you don’t understand the tax problem, the best thing you can do is to contact IRS for more information. That way, everything will be explained to you and you will get guidance on how you can resolve the issue. The IRS is a tax institution ready to serve all taxpayers and you never know, maybe it was an error on their side. But assuming the issue can land you in to a more serious tax problem.

4*  Consider tax relief services

If you can’t handle the tax problems facing you, you need professional help. For instance, if you are facing tax audit or enforcement collection actions, a tax pro can be of great help. Tax relief services involves helping you reduce your tax debt or negotiating a favorable repayment plan depending on your financial situation. This will help you get the IRS off your back. The tax pro you hire to resolve the tax issue will assess your financial situation, and face the IRS on your behalf.

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5*  Avoid shortcuts

When dealing with the IRS, you should always avoid shortcuts. Tax experts knows all the tricks to pay lesser tax bill, and you should consider genuine tricks. For instance, when filing your tax returns, make sure to take advantage of all tax credits and deductions you qualify for. This is a genuine route to pay lesser tax bill. But some other tactics can raise a red flag, and you can be in a more serious tax problem that triggers tax audit.

Final Words

Tax problems can be simple, while others are complex. No matter the tax issue, you should first clarify the facts from the IRS to ensure you understand the issue and how it can be resolved. You will also have an opportunity to explain yourself. From there, if the tax issue is complex, think of hiring a tax expert to help you out.