Frequently Asked Questions About Tax Debt Relief

Q: Do I need a Tax Attorney, CPA, or Accountant to resolve my tax debt or can I do it on my own?

A: You can attempt to resolve your tax debt on your own, but a qualified Tax Attorney, CPA, or Accountant will normally achieve better results. Just like you could do your own wiring on your house, a qualified electrician is going to be more knowledgeable and experienced. Austin & Larson Tax Resolution has the professional knowledge to successfully negotiate resolutions on your tax liabilities. Dealing with the IRS and the State of Michigan is a complicated and time-consuming process. Although you may be able to establish a resolution on your own, you may not get the best resolution for your situation. Also, we will be able to properly advocate for you, making sure that your rights are protected and that the IRS properly follows procedures.

Q: How long does it take to get a resolution or settlement on my tax debt?

A: Your tax resolution can take anywhere from a few days to a few years. The amount of time required depends on the type of resolution sought, the IRS’s timeline, and your availability to provide information. The IRS may assign a Revenue Officer to your account who requests all of your information and back tax returns within thirty days. Or you may have a tax audit or Offer in Compromise that spans a year or more. Each case is specific. After evaluating your specific tax situation, we can give you a better estimation of the amount of time it will take to resolve your tax liabilities.

Q: What are my different options for resolving my tax debt?

A: Some of the different resolution options available are IRS installment agreements, currently non-collectible status, offer in compromise, and bankruptcy. Each tax situation is unique and will require careful analysis to determine which option is best for you. You may also require a combination of different tax resolution options to completely address all of your tax needs.

Q: What documents will be required for a resolution firm to establish tax resolution on my account?

A: If you have missing returns, you will need your W-2s, 1099s, profit and loss statement from your business, and stock sale information. Do not worry if you don’t have all of this information. We can assist you in gathering your tax records. You may also need proof of your income, expenses, assets, and bank statements. This will include your mortgage information, vehicle payoff information, pay stubs, utility statements, and proof of health and life insurance. Other documentation may also be requested depending on your individual situation.

Q: Will the IRS settle my tax debt for less than I owe?

A: The IRS Offer in Compromise program is a process through which the IRS can settle a tax debt for less than the total amount owed. Even though not all taxpayers qualify for this program; it is a great resolution option available to those who qualify. There are also other ways to reduce your tax debt, such as filing original returns to replace IRS-prepared returns or requesting a penalty abatement.

Q: Will the IRS take my principal residence to collect my tax debt?

A: The IRS will usually not take your principal residence to collect on a tax debt, however, they do have the power to do so. The IRS may also issue tax liens against it. Liens may prevent you from refinancing or being able to sell your home. The IRS may also pursue multiple other avenues to attempt to collect your debt including levies and wage garnishments.

Q: Can I influence the speed and results of my tax resolution?

A: You can have a major influence on the results of your tax resolution. Some important tips to remember are:
1) Provide information timely and accurately – Your tax professional is trying to present your information to meet IRS-imposed deadlines to prevent the issuance of levies or garnishments from the IRS. Most resolution options are very time sensitive.
2) Be available for communication and phone calls – The IRS has deadlines to respond and provide all information requested. Your case will move much more efficiently toward resolution if you are responsive.
3) Communicate accurate information – Make sure you communicate all information accurately to your tax professional. Falsely portraying information is illegal and will not help your case.

Q: Should I file married filing jointly or married filing separately?

A: This answer will depend on your personal tax scenario as well as the amount of liability you would like to assume from your spouse. For example, if you are a W-2 employee with proper withholdings and your spouse has a small business for which he fails to make estimates, you would most likely be due a refund whether filing MFS or MFJ. Your spouse on the other hand would probably have a large liability for not paying estimates. If you choose to file jointly, your total liability would probably be less, but you would not be due a refund and you would both be equally responsible for the total tax debt. On the other hand, you may want to file separately when trying to resolve the tax debt so you only have to attempt to resolve one tax debt instead of one for yourself and one for your spouse.