Dealing With Tax Debt May Not Be as Easy as You Think

1. Resolving Tax Debt Can Be Tougher Than You Think Can you resolve your back tax issues yourself, dealing directly with the IRS without professional help? The short answer is yes, you can. Should you? That’s a more complicated question, and it depends on how much you owe, your particular circumstances, and your own personal tolerance for dealing with a high degree of frustration as a result of the IRS bureaucracy. After you finish this, you should have enough information to make that decision. I’m sure you’ve seen and heard plenty of ads for companies that provide tax resolution services—they’re all over television, radio, and the internet. You’ve probably also seen a significant number of ads for professional tax representation services. There’s an important difference between tax resolution and tax representation. Resolution is exactly what it says—it’s the end of the process when the tax debt is resolved. And it’s a very small portion of the tax representation process, which is the defined benefit rules in assisting delinquent taxpayers so that a resolution can be reached. Tax representation includes dealing with the IRS on your behalf, helping you get in compliance by preparing and filing your past due and currently due tax returns (including income, payroll, self-employment, and others), representing you during an audit, analyzing your situation to determine your resolution options, presenting your resolution to the IRS, representing you during any appeals you may choose to file, and so on. Make sure to consider a cost segregation. Every tax resolution and representation firm wants your business—and we are no exception. However, even though we definitely want your business, I’m the first person to say that not everyone who owes back taxes needs a professional to help them get the situation resolved. For example, if you’re just a year or two behind in filing or if the amount you owe is relatively small, you can probably handle your case yourself and save the fees a professional would charge. For example, it would be silly for you to pay a professional $2,000 or $3,000 to help you settle a tax debt of $3,000. That’s why we offer an initial consultation at no cost—it’s not unusual for us to tell a prospective client after our first meeting that he doesn’t really need us. Just use the cash balance plan calculator. In either case, it is a challenge to get your tax debt resolved and to make sure that you stay out of trouble. Life is not easy and you should stay on top of your tax issues and don’t let them get the best of you.