According to the IRS, over 7 million taxpayers fail to file their tax returns each year. With the hefty penalties of filing a late tax return drastically increasing, it is now more important than ever to file in a timely manner. At Geaux Tax Resolution in Lafayette, LA, we understand that tax season causes heartache. Here are 11 ways a tax consultant can help.
11 Ways a Tax Consultant Can Help This Tax Season
1. We Can Help You File Your Tax Return
Not everyone owes the IRS tens of thousands of dollars in penalties, late fees, interest, and tax debt. Some people just feel anxiety regarding tax season because filing their taxes is so complicated. If you’re worried that you’re not getting the full refund you deserve or you want to minimize your tax liability, we can help.
2. We Can Help You File a First-Time Abatement
If you have never been delinquent on paying the IRS, we can help you file a first-time abatement. This form proves that this is the first time you have been unable to pay your tax debt. Upon approval, the IRS waives all penalties for a full tax year. You may qualify for this if you have never had to file a return before, or you have had no penalties in the past three years.
Moreover, to qualify, you can’t have any outstanding requests for un-filed returns. You can be on a repayment plan if you are current on your tax debt. Keep in mind. However, a first-time abatement is a one-time offer. If you file your tax return late in the future, you will most likely have to pay significant penalties.
3. We Can Help You File a Penalty Abatement
If you have already received a first-time abatement, don’t give up hope. You may qualify for a penalty abatement due to special circumstances. The most common are as follows:
- Inability to obtain records
- Erroneous advice from an IRS agent
- Death, serious illness or unavoidable absence
- Fire, casualty or natural disaster
Of course, there are other extenuating circumstances that may provide you with reasonable cause for not filing your tax return on time. For instance, if you cannot pay the full amount of penalties assessed without “undue hardship,” you can qualify for an abatement. During your initial consultation, we can help you argue a case for reasonable cause and win.
4. We Can Help You Request an Installment Agreement
When you owe the IRS money, there are typically four “reasonable collection alternatives” recognized by courts. These are a temporary delay of collection, an installment agreement, an offer in compromise (OIC), or payment in full. If you filed your taxes late, there’s a good chance you can’t afford to pay in full when you consider all fees associated with late filing and payment.
An installment agreement allows you to pay off a small portion of your IRS debt each month until your debt has been satisfied. Keep in mind, however, that you usually have to pay a fee to set up such a plan. You are also responsible for paying interest and a late fee.
5. We Can Help You File an Offer in Compromise
An Offer in Compromise is an incredibly common method for repaying tax debt, including late fees, penalties, and interest. With an Offer in Compromise, qualified individuals are allowed to negotiate their unpaid tax debt and settle for an amount that is lower than what they owe. Such an offer can only exist if you can’t pay your tax liability in full or if doing so would cause “undue hardship.”
To be eligible to file, you must have filed all previous tax returns as required and made all quarterly estimated payments as required. If you make an initial payment with the OIC, that will be applied to your past-due balance, whether it is accepted or not. You do not qualify if you are actively in a bankruptcy proceeding. Pre-qualifying information can be found here.
6. We Can Help You File for a Temporary Delay of Collection
People rarely benefit from a temporary delay in collection. While it means the IRS can’t contact you regarding your past-due debt, you accrue penalties and interest until the debt has been paid in full or you have filed successfully for Chapter 7 bankruptcy. This method is only recommended for people who are receiving a significant windfall in the near future.
7. We Can Help You Negotiate Your Tax Debt
The IRS very rarely forgives tax debt. However, with the help of a tax consultant, you may be able to negotiate your tax debt successfully. Relief programs include:
- Currently not Collectible
- Innocent Spouse Program
- Innocent Spouse Relief
- Relief by Separation of Liability
- Equitable Tax Relief
As scary as it is to owe the IRS money, do not delay applying for one of these programs. As soon as you know you owe the IRS money and you can’t afford it, negotiations need to start. Except in very rare circumstances, you have only two years to file for relief from the date the IRS first attempts to collect your unpaid taxes.
8. We Can Help You File for Innocent Spouse Relief
Some people find themselves in situations where their spouse files their joint tax return incorrectly. The spouse may even fail to pay taxes due to the federal government. If the names, SSNs and addresses of both spouses are on the return, the IRS can come after you for taxes, interest, and penalties, even if you didn’t earn any money last year. Innocent Spouse Relief protects you.
9. We Can Help You File Relief by Separation of Liability
If there is an understatement made on a joint return between you and your spouse or former spouse, you alone are not responsible for all the owed taxes, interest, and penalties. Relief by Separation of Liability allows the debt, and all associated fees to be split between the two parties.
10. We Can Help You File for Equitable Tax Relief
Not everyone qualifies for Innocent Spouse Relief or Relief by Separation of Liability. If you don’t qualify for either of these relief programs, we can help you file for Equitable Tax Relief. This provides you with relief from an underpayment of tax or an understatement of tax.
11. We Can Help You File for Injured Spouse Relief
If you’re not an innocent spouse at all, you may be an injured spouse. If you qualify as an injured spouse, your spouse or former spouse is solely liable for the past-due taxes, interest, and penalties. If you miss out on a refund you are owed because you filed jointly and your spouse, unbeknownst to you, had past-due tax debt, you can receive the tax refund you are owed.
Contact Geaux Tax Resolution Today
Are you confident that you can minimize your tax liability or maximize your tax refund without professional help? Do you enjoy tax season and see it as an opportunity to complete a puzzle with ever-changing pieces? If you don’t, a tax consultant is right for you. To schedule your initial consultation, please contact us today at Geaux Tax Resolution in Lafayette, LA.