Steps for tax resolution
A tax resolution specialist helps clients resolve complex tax problems with the IRS or state tax authorities. The process involves several key steps, from initial assessment to implementing a resolution and ensuring future compliance.
Here are the steps to help a client with tax resolution services.
1. Initial consultation and analysis
This first step is crucial for understanding the client's full situation.
- We will discuss your tax problem. We will meet with you by phone to understand your specific tax issues, goals, and financial circumstances.
- We will assist you in gathering the necessary documentation. You need to obtain all relevant tax notices, financial records, and other documents. We will also get you to sign a Power of Attorney (Form 2848 for the IRS) which is essential to communicate with the tax authorities on your behalf.
- We will assess your tax situation. We will analyze your tax transcripts to determine the extent of the tax liability, including penalties, interest, and unfiled tax returns. This also reveals the status of any current collection actions, such as liens or levies.
2. Establish compliance
Before any resolution can be reached, you must become compliant with all filing requirements.
- We will help you file back tax returns. If you have unfiled returns, We will prepare and file them to bring your account into good standing. This is a prerequisite for most resolution options.
- We will help decide what estimated payments you need to make. We will ensure that you understand what estimated tax payments are needed to make to avoid accumulating further penalties for the current tax year
3. Develop a strategic plan
Based on the client's financial analysis, a resolution strategy is determined.
- Evaluate options. We will assess the client's financial situation to determine the most viable relief options, which may include:
- Offer in Compromise (OIC): A settlement where the IRS agrees to accept a portion of the tax debt.
- Installment Agreement: A payment plan to pay the tax debt over time.
- Currently Not Collectible (CNC) status: A temporary measure to halt collections if the client is experiencing financial hardship.
- Penalty Abatement: Requesting the removal of penalties for "reasonable cause".
- Innocent Spouse Relief: Separating the client's tax liability from their spouse or ex-spouse.
- We will determine the best course of action. We choose the optimal path to resolve the tax issues based on your specific circumstances.
4. Negotiate and implement the plan
This is the active phase of working with the tax authorities.
- We will file necessary forms. We Prepare and submit the required financial statements (such as Form 433-A for individuals) and the specific forms for the chosen resolution strategy.
- We will engage with the tax agency. We communicate directly with the IRS or state agency to negotiate the resolution. This includes providing additional information as requested and responding to any inquiries.
- We will address collection actions. Take immediate steps to halt any active collection actions, such as wage garnishments or bank levies, as part of the resolution process.
5. Monitor and confirm resolution
Once an agreement is reached, it's essential to follow up and ensure proper closure.
- We will follow up. We confirm that the agreed-upon resolution is correctly reflected in your account records. We will call the tax agency back after a week or two to confirm the status.
- We will educate you. We ensure you understand the terms of the resolution, such as payment schedules or future compliance requirements.
6. Tax planning and prevention
To prevent future tax issues, help the client put strategies in place.
- We counsel you how to achieve future compliance. We discuss long-term tax planning strategies, such as adjusting withholding or making estimated payments, to prevent the problem from recurring.
- We stay in touch. We encourage you to call or email if you receive future notices and to maintain a working relationship with our firm.
- Call James D Jones to get started or for a referral to one of our listed partners.
- 410-457-7331