Much like it sounds, tax resolution is the process of developing a strategy to resolve a taxpayer’s outstanding tax issues with the IRS. Ideally, the resolution is permanent and settles the tax liability for the lowest amount allowed by federal law.

Resolving tax issues and tax debt is not black and white – in truth, many taxpayers are unaware of the options available.

Tax problems arise when the IRS believes there to be an error in tax reporting or when a return wasn’t filed. This can occur for both individuals and businesses who file taxes. There are several possible scenarios where the IRS will take action:

• An individual or business hasn’t reported the correct income
• An individual or business did not file a tax return
• An individual or business underpaid on taxes owed

So, what will the agency do when contacting individuals or businesses about one or more of the above scenarios? Depending on the situation, the IRS may request additional information to fill in gaps on a tax return or conduct an audit to ensure the amount of income and number of deductions you’ve reported are accurate. Does this mean you’re in trouble? No! Because the agency has to collect federal taxes and enforce national tax laws, the inquiries you may have received from the IRS are a part of a thorough due diligence process.

There are a variety of situations where you can significantly benefit from having tax professionals on your side.  While you could go it alone, you have better odds of getting your tax problems resolved more promptly with tax resolution services. Here are a few of the most common problems that individual taxpayers and businesses encounter:

1. IRS Auditing

As mentioned above, the IRS can conduct an audit to verify a taxpayer’s income and elected deductions. During this process, it’s important that all of your information is 100% accurate to avoid unnecessary delays. Tax professionals can help you through an audit by verifying you understand exactly what the IRS is looking for.

2. Unfiled Returns

There are countless reasons why a taxpayer may forget or is unable to file a tax return. When the IRS recognizes this, the IRS can estimate what you owe based on previous 1099 and W-2 forms. Every situation is unique, and it may not be as easy as submitting a few documents to the IRS in your case. With tax resolution assistance, you’ll have the help you need to present the documents you need and develop a tax plan moving forward.

3. Payroll Tax Recovery

Having problems paying your employees’ payroll taxes? If so, you may have received a penalty through the Trust Fund Recovery Penalty. This is a very serious penalty for companies that can result in personal asset seizure to pay the IRS the money owed. A tax professional can help strategize a solution to pay the IRS and keep this worst-case scenario at bay.

4. Back Taxes

Individual taxpayers and businesses can owe back taxes, which are the prior year’s partially and fully unpaid taxes. Over time, these taxes accrue both interest and penalties. This situation can quickly snowball, and if left unpaid, can lead to legal consequences like wage garnishment or tax liens. Back taxes can leave taxpayers feeling overwhelmed, which is why it’s best to use tax resolution services to develop a manageable payment plan.

5. Tax Liens

If you’ve been unable to fully pay your property, state, or federal taxes, the IRS can put a lien on your home or other valuable assets. A lien is a claim against a property you own, which can quickly lead to foreclosure on homes or repossession of vehicles. To subvert complications like these, tax liens must be removed and discharged. Tax professionals can not only help ensure your property is protected from liens, but also provide the assurance that existing liens have been discharged.