Tax Compliance Services In Ann Arbor, MI

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What Is Tax Compliance and Why Does the IRS Require It?

Tax compliance means you have filed all required tax returns and you are paying your current-year taxes on time. The IRS requires both of these conditions before it will negotiate any resolution on your existing tax debt. Austin & Larson Tax Resolution provides tax compliance services in Ann Arbor, MI to help you meet both requirements so you can move forward with settling what you owe.

Many taxpayers do not realize that compliance is a prerequisite for relief. The IRS will not approve an installment agreement, an Offer in Compromise, or a currently non-collectible status if you have unfiled returns or are not paying your current taxes. Think of it this way: the IRS will not help you resolve old debt if you are creating new debt at the same time.

Tax compliance has two parts. First, every required federal and Michigan state tax return must be filed, even if you cannot pay the balance due. Second, your current-year taxes must be properly withheld from wages or paid through quarterly estimated tax payments. Missing either piece means the IRS considers you non-compliant, and that blocks every resolution option available to you.

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What Happens If You Are Not in Tax Compliance?

Failing to get into tax compliance exposes you to serious financial consequences. The IRS charges penalties of 5% per month on unfiled returns and 0.5% per month on unpaid balances, plus interest. Beyond penalties, the IRS can place liens on your property, levy your bank accounts, and garnish your wages without a court order.

These are not just warnings on paper. The IRS uses automated systems to flag non-filers and underreporters. The State of Michigan runs similar programs through the Michigan Department of Treasury, which can intercept your state tax refund and pursue collections independently of the IRS.

Here is what you risk by staying out of compliance:

IRS failure-to-file penalty: 5% of the unpaid tax for each month your return is late, up to 25% of the total balance
IRS failure-to-pay penalty: 0.5% of the unpaid tax per month, also up to 25%
Compounding interest on both the tax owed and the penalties themselves
Federal tax liens attached to your home, vehicles, and other property
Bank levies that freeze and seize funds from your accounts
Wage garnishment that takes a portion of every paycheck before you see it
Passport revocation for seriously delinquent tax debt exceeding $62,000

The longer you wait, the more these penalties and interest charges add to your total balance. That is why the team at Austin & Larson Tax Resolution urges you to address compliance issues as soon as possible.

Tax Compliance Steps for Different Types of Michigan Taxpayers

Getting into compliance looks different depending on whether you earn wages, run your own business, or operate a corporation. Austin & Larson Tax Resolution works with all three taxpayer types across Washtenaw County and throughout Michigan. Below are the specific steps each type needs to follow.

Individual Wage Earners

If you work for an employer, tax compliance means your withholding is set correctly so you do not end up owing at the end of the year. Start by reviewing how many exemptions you claim on your Form W-4. Then update that form with your payroll department to match your actual tax situation.

If you work for more than one employer, pay close attention. Each job calculates withholding based only on the income it pays you. Combined, those jobs may push you into a higher tax bracket. You may need to withhold additional amounts to cover the gap. Bonuses, inheritances, and cashing out a 401(k) can also create unexpected balances if you do not plan ahead.

Self-Employed Taxpayers

Self-employed individuals face a more complex compliance path. You need to keep accurate books and records so you know your gross income for the year. From there, you can project your annual net income and calculate what you owe.

The IRS generally expects quarterly estimated tax payments if you will owe more than $1,000 for the year. Those payments are due on April 15, June 15, September 15, and January 15 of the following year. If you have a seasonal business, adjust your estimates so you do not overpay or underpay by too much. Rental income and other non-wage earnings may also require separate estimated payments.

Business Owners

Businesses have additional compliance obligations depending on their structure. A C-Corporation must make its own estimated tax payments at the corporate level. S-Corporations and Partnerships are pass-through entities, meaning the tax liability flows to the individual owners.

Any business with employees must handle payroll tax deposits correctly. The IRS assigns a deposit frequency, and you must meet every deadline. Payroll returns are filed on Forms 941 (quarterly) or 944 (annually), along with Form 940 for federal unemployment tax. Failure to make timely deposits can lead to large liabilities, and the IRS can hold responsible individuals personally liable for unpaid payroll taxes through the Trust Fund Recovery Penalty.

Even when these steps seem straightforward, getting them right is harder than it looks. Business income fluctuates, and the rules around each entity type differ. Working with a professional who understands both IRS and Michigan tax requirements can save you from creating new problems while trying to solve old ones.

How Austin & Larson Gets You Into Full Compliance

Austin & Larson Tax Resolution follows a clear, step-by-step process to bring you into full IRS and Michigan compliance. Our tax compliance services in Ann Arbor, MI start with a free consultation and move through return preparation, withholding adjustments, and ongoing support so you stay compliant after your debt is resolved.

Step 1: Free Compliance Consultation

During your first call or visit to our Ann Arbor office, we ask about your current tax situation. We identify which returns are missing, what you currently owe, and whether you are properly withholding or making estimated payments. This conversation is free and confidential.

Step 2: Pull Your IRS and Michigan Transcripts

We contact the IRS and the State of Michigan on your behalf to get a complete picture of your tax history. This shows us exactly which years are unfiled, which balances are outstanding, and what the IRS already knows about your income.

Step 3: Prepare and File Missing Returns

Our team of Enrolled Agents, CPAs, and Tax Attorneys prepares and files all outstanding federal and Michigan state returns. We work to claim every deduction and credit you are entitled to, which can significantly reduce the amount you owe. Our tax preparation services are designed to minimize your total liability before we ever start negotiating with the IRS.

Step 4: Fix Your Current-Year Tax Payments

We review your income sources and adjust your W-4 withholding or set up quarterly estimated tax payments so your current-year taxes are covered. This prevents you from falling out of compliance again.

Step 5: Maintain Compliance and Move to Resolution

Once you are fully compliant, the IRS will work with you on resolving your back tax balance. We stay involved to make sure you remain compliant throughout the resolution process and beyond.

Tax Resolution Options Available Once You Are Compliant

After you reach full compliance, several IRS programs open up to help you resolve your back tax balance. Austin & Larson Tax Resolution evaluates your financial situation and recommends the option that provides the best outcome for your circumstances.

IRS Installment Agreements allow you to pay your tax debt in monthly payments over time. The IRS offers several types of installment plans depending on how much you owe and your ability to pay. This is the most common resolution path for taxpayers who can afford a monthly payment.
Offer in Compromise (OIC) lets you settle your tax debt for less than the full amount owed. The IRS considers your income, expenses, assets, and overall ability to pay when deciding whether to accept an offer. This program is not available to everyone, but our team can determine if you qualify and prepare a strong application.
Currently Non-Collectible Status is an option if your monthly expenses leave you unable to make any payment toward your tax debt. The IRS temporarily pauses collection activity, giving you breathing room while your financial situation improves.
Penalty Abatement can reduce or remove penalties charged for late filing or late payment. If you have a reasonable cause for falling behind, such as a medical emergency or natural disaster, the IRS may agree to remove those charges.

Each of these programs requires you to be in compliance first. That is why the compliance work we do at Austin & Larson is the foundation of every successful tax resolution.

Why Ann Arbor Taxpayers Choose Austin & Larson Tax Resolution

Austin & Larson Tax Resolution combines local presence, multi-disciplinary expertise, and a personal approach that national tax relief companies cannot match. Our Ann Arbor clients work directly with licensed professionals who understand Michigan tax law and IRS procedures.

A team that covers every angle. Our staff includes IRS Enrolled Agents, Tax Attorneys, CPAs, and Tax Accountants. This means your compliance and resolution case is handled by the right specialist at every stage, not passed off to a call center.
A local office you can visit. Unlike national firms that handle everything by phone, we meet with clients in person at our Ann Arbor office. We also have locations in Brighton, Lansing, and Saginaw for clients across Michigan.
A free consultation with no pressure. Your first meeting is free. We review your situation, explain your options, and give you a clear picture of what to expect before you make any commitment.

Frequently Asked Questions About Tax Compliance Services in Ann Arbor, MI

What does it mean to be in tax compliance with the IRS?

Being in tax compliance means you have filed all required federal and state tax returns and you are paying your current-year taxes through proper withholding or estimated payments. The IRS requires both conditions before it will consider any resolution program for your back tax debt. If you have even one unfiled return, the IRS considers you non-compliant and will not negotiate a settlement, payment plan, or hardship status.

How long does it take to get into full tax compliance?

The timeline depends on how many years of unfiled returns you have and the complexity of your tax situation. For a taxpayer with one or two missing returns, the process can take a few weeks. If you have several years of unfiled returns or a business with payroll tax issues, it may take two to three months. Austin & Larson Tax Resolution works to complete your compliance as quickly as possible so we can begin the resolution process.

How much do tax compliance services cost?

Austin & Larson Tax Resolution offers a free initial consultation to review your situation and outline what needs to be done. The cost of compliance services varies depending on the number of returns that need to be filed, the complexity of your income, and whether you have business or payroll tax obligations. We provide a clear fee estimate before any work begins so there are no surprises. [CLIENT TO PROVIDE: specific fee range or starting price if willing to disclose]

Can I get into compliance on my own without professional help?

You can file missing returns and adjust your withholding yourself. However, mistakes on back tax returns can result in paying more than you legally owe or triggering an audit. A professional tax preparer, especially one experienced in IRS procedures, can identify deductions and credits you might miss and ensure your returns are filed correctly. For taxpayers with multiple years of unfiled returns, business income, or ongoing IRS collection activity, professional help is strongly recommended.

What if I cannot afford to pay the taxes I owe when I file my back returns?

File the returns anyway. The IRS charges a much higher penalty for not filing (5% per month) than for not paying (0.5% per month). Filing your returns gets you into compliance even if you cannot pay the full balance right away. Once you are compliant, Austin & Larson can negotiate a payment plan, Offer in Compromise, or other resolution option based on what you can actually afford.

Will the IRS come after me if I live in Ann Arbor and owe back taxes?

Yes. The IRS pursues collection activity regardless of where you live. Michigan taxpayers also face enforcement from the Michigan Department of Treasury, which can levy bank accounts and garnish wages independently. Ann Arbor residents and Washtenaw County business owners are not exempt from these actions. The best way to protect yourself is to get into compliance and work toward a resolution before the IRS escalates collection efforts.

What is the difference between tax compliance and tax resolution?

Tax compliance is the process of filing all missing returns and getting your current-year taxes set up correctly. Tax resolution is the process of negotiating with the IRS to settle or reduce your back tax balance through programs like installment agreements, Offers in Compromise, or non-collectible status. Compliance comes first. You cannot resolve your tax debt until you are fully compliant. Austin & Larson handles both steps from start to finish.

Do I need a tax attorney or can an Enrolled Agent handle my compliance case?

Both IRS Enrolled Agents and tax attorneys are authorized to represent you before the IRS. Enrolled Agents specialize in tax matters and can handle most compliance and resolution cases. A tax attorney is typically needed when your case involves litigation, criminal tax issues, or complex legal questions. Austin & Larson Tax Resolution has both on staff, so you are matched with the right professional for your specific situation.

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