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IRS Tax Negotiation

While taxpayers may always represent themselves in front of the IRS, many turn to IRS Tax attorneys, CPAs, and EAs in order to maximize their chances of lowering their tax liability and having a favorable settlement. Owing the Internal Revenue Service money is intimidating to most people. As long as the IRS knows it is going to get paid at some point, it can wait until you are in a better financial position to do so. Of course, the longer you take to pay your tax debt, the more you will owe in the end.  Nobody wants to neglect the Internal Revenue Service, but it can be easy to do as mistakes and oversights can happen.
Here are some ways you can prepare yourself for an IRS tax negotiation as it is not a one step process but rather a series of things:

  • Contacting the appropriate IRS unit where your tax matter is currently being handled is typically the first step to take in an IRS tax negotiation.  You can request a 30 day hold to give yourself some breathing room and do your due diligence.
  • Utilize this time to gather all your tax documents and if you do not have access to them, you can always request free copies from the IRS via IRS Wage and Income Transcripts.
  • Also request IRS Account Transcripts to see what portion of your liability is tax, penalties, and interest.  This will give you a better picture of how to go about correcting your issue.  It is also called a Compliance Check of your account.
  • Get yourself current by preparing unfiled tax returns or hire a tax professional to do so for you.  If you have unfiled tax returns, prepare them, and if you have inccorectly prepared tax returns, then you might have to amend them.
  • Set yourself on an Installment Agreement, a Partial Pay Installment Agreement or perhaps you may qualify for a Currently Non Collectible Status.  In some cases you will be required to furnish backup documentation for the IRS to allow for this.  Alternatively, IRS tax negotiation can entail applying for an Offer In Compromise, where you can ultimately negotiate your liability down for a fraction fo what you owe.  Those taxpayers who do not agree with the outcome of the Offer (OIC) unit, still have a chance to Appeal and take further steps in their IRS tax negotiation.
  • There are instances when IRS tax negotiation is done via a Bankruptcy filing, however you should first consult with an attorney who has dealt with tax resolution matters before, since the rules are very specific as to which types of tax liabilties can be abated.
  • There are also instances where the IRS tax negotiation or tax planning is in a form of a liability expiring via a statute of expirations, called a CSED.
  • Lastly, plan ahead and focus on the future. It is a good opportunity to review your overall tax situation and to come up with strategies for reducing your taxes and achieving your financial goals. Make sure to pay your estimated taxes in the interim so you do not accrue additional liabilities.