Frequently Asked Questions (FAQs)
Your IRS Tax Problem Questions Answered by Beacon Tax AdvocatesAt Beacon Tax Advocates, we understand that IRS tax problems can be complex and often confusing. That’s why we’ve compiled a list of frequently asked questions to help clarify some common concerns. If you can’t find the answer you’re looking for, don’t hesitate to reach out to us directly. We’re here to help.
1. What is IRS tax resolution?
IRS tax resolution refers to the process of resolving tax issues and disputes with the Internal Revenue Service (IRS). It involves addressing outstanding tax liabilities, negotiating settlements, and finding solutions to bring you into compliance with tax laws.
2. What are some of the common tax issues that require IRS tax resolution?
Common tax issues that may require IRS tax resolution include unpaid taxes, unfiled tax returns, IRS audits, tax liens, tax levies, wage garnishments, and penalties or interest on tax debt.
3. Do I need professional help for IRS tax resolution?
While you can attempt to navigate the IRS tax resolution process on your own, it’s highly recommended to seek professional help. Tax laws are complex, and an experienced tax resolution professional can guide you through the process, ensure your rights are protected, and help you achieve the best possible outcome.
4. How can a tax resolution professional help me?
A tax resolution professional can help you by analyzing your situation, communicating with the IRS on your behalf, developing a personalized resolution strategy, and negotiating with the IRS. They can also help you understand your rights, file any necessary paperwork, and represent you during IRS proceedings.
5. Can IRS tax debts be settled for less than the full amount owed?
Yes, it is possible to settle IRS tax debts for less than the full amount owed through the Offer in Compromise (OIC) program. However, the IRS has strict criteria for qualifying for an OIC, and it’s important to work with a tax resolution professional to determine your eligibility and navigate the application process.
6. How long does the IRS tax resolution process take?
The duration of the IRS tax resolution process can vary depending on the complexity of your case and the specific resolution option pursued. It can range from several months to a year or more. A tax resolution professional can provide a more accurate timeline based on your unique circumstances.
7. Can I stop IRS collections while in the tax resolution process?
In many cases, talking to the IRS can put a temporary hold on certain collection activities such as tax liens, bank levies, and wage garnishments. However, it’s crucial to work with a tax resolution professional who can guide you on the specific steps to take to halt collections while your case is being resolved.
8. How much does IRS tax resolution services cost?
The cost of IRS tax resolution services can vary depending on the complexity of your case and the specific services required. Some tax resolution professionals charge a flat fee, while others may have an hourly rate or a combination of both. It’s important to discuss fees and payment structures with your chosen tax resolution professional upfront.
9. What is an IRS tax lien?
An IRS tax lien is a legal claim the government places on your property or assets to secure payment of your tax debt. The IRS tax lien can impact your creditworthiness and ability to sell or transfer assets.
10. How does an IRS tax lien affect my credit score?
An IRS tax lien can negatively impact your credit score. While IRS tax liens are no longer reported on credit reports it may still negatively impact your credit as lenders may become aware of your IRS tax lien through other means. The IRS is allowed to file a lien in the county registry of deeds which is open to the public. An IRS tax lien can therefore make it more difficult to obtain new credit, secure loans, or qualify for favorable interest rates.
11. Can I sell or refinance my property with an IRS tax lien?
It’s possible to sell or refinance your property with an IRS tax lien, however the tax lien must be addressed before it can be sold or refinanced. Typically, the IRS will need to be paid out of the proceeds first or other arrangements will need to be made to satisfy the IRS before the sale or refinance can occur.
12. What is an IRS tax levy?
An IRS tax levy is an asset seizure by the IRS. It generally takes the form of a bank levy or garnishment of your wages but it can also include seizure of your real estate, vehicles, and other valuable property such as a retirement account.
13. Can the IRS levy my bank account without notice?
Generally, the IRS is required to provide notice before levying your bank account. The notice typically includes information about your right to appeal and options for resolving the tax debt. However, if the IRS believes collection of the tax is in jeopardy, then it can levy your bank accounts without prior notice.
14. How can I stop an IRS tax levy?
To stop an IRS tax levy, you can either contact the IRS directly or work with a tax professional to explore options such as negotiating a payment plan, filing an appeal, or applying for a levy release. Acting promptly and seeking professional assistance can increase your chances of halting the levy and finding a suitable resolution.
15. Can the IRS seize my wages through a tax levy?
Yes, the IRS can levy your wages through a process known as wage garnishment. A wage garnishment allows the IRS to deduct a portion of your paycheck to satisfy your tax debt. However, there are limits on the amount that can be garnished, and you have certain rights and options to address wage garnishments.
16. What is a nonfiler?
A nonfiler is an individual or business entity that has failed to file their required tax returns with the IRS for one or more years. Failing to file tax returns can result in penalties, interest, and other potential consequences.
17. What are the potential consequences of being a nonfiler?
The consequences of being a nonfiler can include penalties, interest, and potential legal actions by the IRS. These may include wage garnishments, tax liens, levies on bank accounts, and even criminal charges in cases of deliberate tax evasion.
18. Can the IRS file a tax return for me if I am a nonfiler?
Yes, if you are a nonfiler, the IRS can file a substitute tax return on your behalf, known as a Substitute for Return (SFR). However, it’s important to note that an SFR may not consider all available deductions and credits, potentially resulting in a higher tax liability than if you had filed the return yourself.
19. How can I become compliant if I am a nonfiler?
To become compliant as a nonfiler, you will need to file the required tax returns for the years in question. This involves gathering the necessary financial information, completing the appropriate tax forms, and submitting them to the IRS. Seeking professional assistance can help ensure accurate and timely filings.
20. Can I file my past due tax returns electronically?
Generally, no. If you are filing past due tax returns, they may need to be filed through the mail rather than electronically. The IRS only accepts electronic tax returns for the last couple of years.
21. Will I face penalties for filing my past due tax returns?
While late-filed tax returns may incur penalties, the IRS does allow for abatement of penalties if you meet specific criteria. It’s recommended to consult with a tax professional to determine your eligibility for penalty relief.
22. Can I negotiate a payment plan if I owe taxes as a nonfiler?
Yes, if you owe taxes as a nonfiler, you can negotiate a payment plan with the IRS to fulfill your tax obligations over time. This allows you to pay off your tax debt in manageable installments, based on your financial situation.