It can be more than a little stressful to find out you owe the IRS a significant amount of money. In some cases, you have simply completed your tax returns and learned that you owe thousands or even tens of thousands of dollars in taxes this year. In other cases, you may have received a notice from the IRS that you underpaid or your tax liability was adjusted through an audit process. Now, however, you are aware that you own a large sum of money to the IRS and want to know what your options are.
Exploring Your Options
If the amount of money owed is more than you can pay right now, you may want to consider the assistance of a tax relief service. There are a number of these companies that you can call for guidance, and many will provide you with a complimentary consultation. During that consultation, an experienced tax professional will review your unique situation, and can advise you if you would benefit from their services.
Working With a Tax Relief Company
After the initial consultation, you have the choice to engage the services of the company or to walk away and deal with the IRS on your own. Once you decide to work with the company, your file will be assigned to a tax professional who can best help you with your unique tax debt situation. Often, a CPA will review your file to verify the IRS’ findings. If a mistake has been made, the company will work with the IRS to reduce your liability. A tax attorney or special tax agent may also be assigned to your file, and they may work with you and the IRS to establish a monthly payment plan or to settle the debt if possible. You may work with just one tax professional or several different professionals throughout the process depending on the unique circumstances of your tax situation.
Possible IRS Actions
If you do owe the IRS a significant amount of money, the IRS does have the right to take various actions in order to collect payment. They can contact your employer and garnish your wages until payment has been made in full. They may also place a tax lien on your home. In some cases, they can seize assets for payment on taxes. If they believe you committed fraud to avoid paying taxes, they may prosecute you under the law, and imprisonment is a possibility. These options can be intimidating to consider, and so many people do make the decision to work with professionals who have experience dealing with the IRS and who understand taxation laws. By working with a tax service, you may still face some of these consequences. However, a tax service may also be able to alleviate some of your tax debt or to establish more attractive terms than these options.
Finding a Company to Work With
There are many benefits to you for working with a tax service for relief or management of your debt. For example, a tax service company can work with the IRS to settle the debt and reduce the amount owed, or they can help you to negotiate payment terms that are easier for you to manage. These services, however, are not free and you will have to pay a fee for them. The Federal Trade Commission does warn taxpayers against working with a company that charges an up-front fee for this service. There are some companies that claim to offer this service, take your up-front fee, and then do not offer any benefit to the taxpayer. Keep in mind also that only certain tax professionals can represent you when dealing with the IRS, and these professionals include tax attorneys, CPA, and enrolled agents. You will also want to do your own research about the company, and read the fine print on the service agreement before signing any paperwork.
The unfortunate truth is that not all companies that specialize in providing tax relief actually deliver, and some simply end up taking your money. Others, however, do offer you real benefits and can help to alleviate your debt with the IRS or can otherwise help you to structure more attractive repayment terms. Take time to explore the options available to you, do your research on the companies, and make a decision that is best suited for your needs and unique tax situation.