Orange County Accountant

With the recent downturn in the economy, Americans find themselves not only facing unsecured credit card debt problems, and difficulties handling their home and vehicle loans, but oftentimes unable to pay their IRS taxes in a timely manner. There is IRS tax debt help available to anyone who finds they owe money for back income taxes to the Internal Revenue Service. The federal government offers many tax relief programs that are designed to help the taxpayer repay the delinquent IRS tax debt due. But if you are a struggling taxpayer with a large IRS tax debt, then repaying the full IRS back tax debt may not be an option for you and your family. In fact, it may seem like an insurmountable financial hurdle you will never be able to overcome. That is why there is an IRS tax relief program called Offer in Compromise.Federal law does grant the IRS the power to agree to a settlement of your IRS tax debt for less than the actual amount you owe. Sometimes, the IRS can accept significantly less to end your IRS tax debt. However, the process of actually getting the IRS to agree to a tax settlement is not simple or straightforward. You may need expert IRS tax debt settlement help to insure that you have filed everything correctly and that you give yourself the very best chance to be approved for a reduced tax debt settlement offer. The IRS does not widely promote this program and it is not a full amnesty program. It is however, a way to significantly reduce your IRS tax debt, and have the “compromised amount” be considered payment in full for the IRS back tax liability. It is as close as you can get to a “fresh start” with the IRS!Knowing when it is prudent to seek professional IRS tax debt settlement help can be crucial to your success. The paperwork for the IRS tax debt settlement program is complicated. You are required to prove that you will never be able to pay back the entire tax debt, or that paying off your tax debt will cause “undue hardship”. You must commit to a full financial disclosure. The IRS looks at your income and all your “lifestyle expenses”. They even require an inventory of all your accounts, possessions, and the equity in your home. Getting approved can be a lengthy process and there are no guarantees you will quality for this form of IRS tax relief. The process can take up to a year. Having professional tax debt help can “make the difference” between success and failure. You simply cannot be expected to know all the complexities of the IRS settlement process to insure your tax debt settlement offer is accepted. But IRS tax relief professionals can give you this “much needed edge”.There are a number of companies that are able to provide delinquent taxpayers with the IRS tax debt settlement help they need. Some of these firms are actually tax law firms, while some are companies with tax specialists that assist with IRS back taxes. These firms are typically staffed with tax attorneys, enrolled agents, CPAs, and even previous IRS employees who have the “inside track” on how to successfully secure a tax debt settlement offer from the IRS. These companies will offer a free tax analysis which allows you to have your tax matter reviewed at no initial cost. These tax firms are also aware of all other IRS tax relief programs available should it not appear that you are likely to quality for tax debt settlement through the Offer in Compromise program. It is always advisable to check the record of any professional tax debt help firm or company you intend to contract with to handle your IRS tax debt problem. It goes without saying that successful resolution of your IRS tax debt is important!

IRS Debt Help:
Do you owe the IRS? Are you struggling with IRS debts and cannot figure out what to do? Don’t despair, you are not alone. Many Americans owe back taxes, or cannot afford to pay their IRS debts. If you want to get IRS debt help, it’s important to understand the different IRS tax debt strategies.
There are five strategies for getting out of IRS tax debt.
1.Offer in Compromise: a program where you can settle your tax debts for less than what you owe. Requires making a lump sum or short term payment plan to pay off the IRS at a reduced dollar amount.
2.Installment agreement: a monthly payment plan for paying off the IRS.
3.Partial payment installment agreement: a somewhat new debt management program where you have a long term payment plan to pay off the IRS at a reduced dollar amount.
4.Not currently collectible: a program where the IRS voluntarily agrees not to collect on the tax debt for a year or so.
5.Filing bankruptcy: discharge your tax debts under the strict rules of a Chapter 7 or 13 bankruptcy petition.
Offer in Compromise
Many people who find themselves in debt to the IRS might focus on the first option above – the Offer in Compromise (”OIC”). For those who qualify it can be the optimal solution, however, it is important to note that not everyone qualifies for the Offer in Compromise solution. Only about 15% of applicants succeed in reducing their debts through the OIC program. For this reason and because of the complexity of filing an Offer in Compromise many people enlist the services of a Tax Professional who has a track record of success negotiating with the IRS. This Tax Professional will not only be able to determine if you are eligible to reduce your IRS debts via an OIC but they will also assist you in navigating the complicated IRS bureaucracy to achieve the desired outcome.
An Offer in Compromise is a lengthy and time-consuming process. It takes most individuals anywhere from 12 months to 24 months to achieve a successful resolution on your offer application. Through an Offer in Compromise, taxpayers agree to pay the IRS only the reasonable collection potential instead of the full amount of taxes owed. For some people the “reasonable collection potential” will be less than the full amount of taxes owed – sometimes as little as 10%.
Installment Agreement
Many taxpayers cannot qualify for an Offer in Compromise, Statute of Limitations expiration, or bankruptcy relief but still seek resolution for their IRS liability. In these cases, it may be possible to negotiate long term IRS payment arrangements. The IRS allows “structuring” five primary types of payment plans, or Installment Agreements: Guaranteed Installment Agreements, Streamlined Installment Agreements, In-Business Trust Fund Agreements, Long-Term Installment Agreements, and Installment Agreements on Specified Balance Due Accounts.
Currently Not Collectible
If a taxpayer does not qualify for an offer in compromise and cannot afford to pay an Installment Agreement, Currently not Collectible (CNC) status may be an option. If a client is placed in CNC status, the statute of limitations continues to run and the IRS will not pursue collection actions. However, if a taxpayer’s financial status improves, the IRS can remove the file from CNC status and return to active collection status.
Reasons for attempting CNC status:
1. Taxpayer has income below allowable expenses and there is no indication that the financial situation will improve in the future;
2. Due to high equity, the taxpayer does not qualify for an OIC and has more allowable expenses than income so an Installment Agreement is not an option; and,
3. Taxpayer has more allowable expenses than income and the statute of limitations is getting close to expiring.
Statute of Limitation for IRS Tax Debt
The IRS has 10 years to collect outstanding tax liabilities. This is measured from the day a tax liability has been finalized. A tax liability can be finalized in a number of ways. It could be a balance due on a tax return, an assessment from an audit, or a proposed assessment that has become final. From that day, the IRS has ten years to collect the full amount, plus any penalties and interest. If the IRS doesn’t collect the full amount in the 10-year period, then the remaining balance on the account disappears forever. The statute of limitations on collecting the tax has expired.
Selecting a Tax Professional to handle your IRS Tax Debts
Because of the complexity of the Offer in Compromise and other IRS tax debt processes, many taxpayers hire a tax professional to prepare their IRS documentation and to negotiate directly with the IRS. Tax professionals charge anywhere from $1,500 to $6,000 or more for accurate and thorough IRS representation. Because most of the IRS tax debt solutions involve negotiating with the IRS, your tax professional should be admitted to practice before the IRS. You should be looking for a Tax Attorney, an Enrolled Agent (EA), or a Certified Public Accountant (CPA) to handle your Offer in Compromise. The tax professional must know about the laws governing IRS collection of tax debts, how the IRS evaluates offers, and what all the options are for resolving tax debt problems. “Taxpayers should be looking for a tax professional with years of experience in IRS collection matters, especially experience in dealing with revenue officers, the Automated Collection Systems division, and the complex IRS process” according to Jim Brown, the managing tax attorney with Freedom Tax Relief.
Please be aware that even the most successful tax professionals have lost Offer in Compromise cases, so not every consumer looking for IRS debt help is guaranteed the most savings. It is important to know that your Offer in Compromise will be decided based on your unique financial situation. If you do need IRS debt help, having a tax professional represent you before the IRS will help ensure that all letters and phone calls from the IRS are handled quickly and professionally. But in the end, it is up to the IRS to make a decision about your case.
It is important to know that like death and taxes, your IRS tax debt issue will not simply vanish, so you should seek help before the IRS escalates collection efforts and/or you accrue additional penalties and interest.

IRS tax debtIf you happened to be one of the unfortunate individuals to owe tax debt from your past years, or you have paid your taxes for the current year, and still expect to owe further taxes to the IRS in the form of IRS debt, it?s possible for you to find a solution to redeem your taxes. The actual solution lies in not ignoring to pay your debt. Even though the IRS can collect the taxes up to ten years, it possesses many other powerful options to recover, and chances are it will. If you have outstanding IRS tax debt, the best possible solution is to utilize your savings, or alternatively borrow some funds to clear the debt. By paying your entire outstanding dues, it?s possible to save upon the penalties and fines, which are likely to be levied in case you decide to avail more time and clear your taxes over a period of time. If one borrows against some asset value such as your home, it?s quite possible the interest incurred might be tax deductible. It?s also possible to avail tax relief if you can represent your case properly to the IRS.Tax attorney servicesSince last few years, tax attorneys, and the services offered by them have been in high demand, especially since the tax season is approaching soon. Many taxpayers are likely to need tax help. While selecting your representative to deal with your IRS issues and concerns, it is quite important to retain somebody who can represent you to the best of his or her abilities, and not have conflicts while representing your case to the IRS. Even though the tax attorneys can be quite knowledgeable, properly trained, and have the ability to handle your issues, it is found that they can lack in aggressiveness when it comes to representing you to the IRS. The thing is most agencies like to maintain good terms with the tax authorities, since their entire business is dependent upon special tax clients, helping out tax debtors in availing IRS debt help, and good market reputation. It?s sad that IRS often takes advantage of some timid and docile tax attorneys because it knows that firm prefer to keep a positive image, and IRS can well damage the reputation through propaganda.It?s generally believed that it?s expensive to retain a good tax attorney to avail IRS debt relief. At a first glance, the client might feel that the tax laws are simple to understand and straight forward. So they often feel they can communicate directly with the IRS and avail an acceptable situation. This could turn out to be a mistake, since IRS rules can be interpreted in many different ways, and IRS is an expert in that. So it?s recommended not to take any chances, and have an effective arbitration by employing the services of an experienced tax attorney to get effective tax debt settlement.