How Long Does Tax Resolution Usually Take?

April 15, 2022

Over 11 million Americans currently owe back taxes, so if you’re struggling to pay your bill, you’re not alone. To help you resolve your situation, you can hire tax resolution services. A highly qualified advisor can let you know which IRS forgiveness program is right for you. This is extremely important since reaching an agreement with the government can prevent you from losing your home, savings, and income to the IRS.

But how long will it take until your issue is resolved? The answer is that it all depends on your individual situation. While some people can come to an installment agreement within a few minutes, others need to negotiate with tax representatives for many months. In this post, we’ll have a closer look at how long tax resolution might take and what the various scenarios are.

How Long Will You Need Tax Resolution Services?

When you first get in touch with a tax professional, they will invite you to an initial consultation. The aim of this meeting is to find out more about your situation and come up with a viable plan. If you decide to hire a specialist, they can tell you how long the resolution process might take. In some cases, tax issues can be resolved within a few hours or days, but this isn’t always the case.

Most people who are in trouble with the IRS are either being audited or have significant tax debt. In either case, it can take months or even years for the issue to be sorted out. Sometimes, it is impossible for people to meet their tax obligations in full, in which case they should speak to their advisor about the IRS forgiveness program. There might be a way to reduce tax debt to a more manageable level.

An Audit 

The IRS audits less than half a percent of the population each year. If you’ve filled out your tax return on time and correctly, there is little chance that you’re selected. However, mistakes can happen, and if you’ve received a letter by the IRS stating that you will be audited, you should contact a resolution specialist. They can let you know what to expect and how long the process might take.

The simplest type of audit is called a correspondence audit, and it is conducted remotely. Most likely, you’ll have to send in some paperwork and amend your return slightly, but this shouldn’t take more than three to six months. During an office audit, you have to visit an IRS representative in person. This process could also take approximately six months. A field audit involves being inspected at your home or workplace, so it lasts longer, sometimes up to a year.

Tax Debt 

As mentioned, tax debt is a widespread issue in the US. Sometimes, it can be resolved easily, for example by setting up an installment agreement or getting the penalties wiped off the taxpayer’s account. This type of solution can offer instant relief since it only takes a few minutes or hours. But at other times, getting rid of the debt can take many months. Your specialist can let you know whether you could spread out or even get your debt written off.

Making Use of the IRS’s Forgiveness Program 

Tax resolution services are designed to help you resolve your issue as quickly and efficiently as possible. Whether you’ve been struggling with tax debt for a long time or you’ve received a hefty bill after an audit, your specialist can help you take advantage of the IRS’s forgiveness program.

There are various options, including making an installment agreement or an offer in compromise, getting currently not collectible status, or requesting innocent spouse relief. You can also get your penalties removed, especially if this is the first time you’ve had trouble with the IRS.

Installment Agreement

If you have a steady income and can pay off a small amount of debt each month, your tax professional might advise you to make an installment agreement with the IRS. This involves paying your back taxes over a more manageable time period of up to six years. Taxpayers who have small amounts of debt can use the online payment agreement tool to come up with an instant solution. This process shouldn’t take more than twenty minutes.

However, those who owe more than $50,000 should contact the IRS by phone. They will need to verify their financial situation and also let the government know how they will pay the debt. For instance, it could be deducted from payroll, paid by direct debit, or taken from a checking account. From the initial phone call, it might take one to two months for the agreement to be finalized.

Offer in Compromise 

People who don’t believe they will ever be able to come up with enough money to pay their back taxes could make an offer in compromise. This allows them to pay off part of the balance, while the rest is forgiven. Unfortunately, an OIC is hard to obtain, and it can take a long time. Taxpayers who owe less than $50,000 can expect a result within four to six months, but those with a larger bill might need to wait for up to a year.

Currently Not Collectible Status 

Anyone who’s experiencing financial hardship won’t be required to pay any back taxes. If you’re having trouble paying for your basic living expenses, the IRS may grant you currently not collectible status. You’ll need to file all the relevant paperwork and documentation with the help of your tax advisor, so the process can take several months. It’s also important to remember that CNC status may not be permanent if your situation changes within ten years.

Innocent Spouse Relief 

If you’re facing a high tax bill due to a mistake made by your spouse and you didn’t know about the issue at the time of filing, the IRS can offer you innocent spouse relief. The process is reasonably straightforward, but it can take up to six months for the IRS to make a decision. This is because the officials have to contact your spouse to confirm the situation and work through your tax information.

Penalty Abatement 

Usually, people with back taxes also have to pay significant fines and penalties. Penalty abatement is a quick and easy way to get rid of them and thereby significantly lighten the tax burden. This option is open to anyone who has never been in trouble with the IRS before or who has reasonable cause for paying late. In clear-cut cases, the decision can be made instantly, but sometimes, supporting documentation is necessary.

Tax resolution can be extremely easy and quick in certain situations, but it can also be a long process that takes a year or more. If you’re struggling to pay your taxes or you’ve received a letter stating that you will be audited, you should contact a specialist as soon as possible. Failing to come to an agreement with the IRS can cost you your savings, a part of your income, and even your home.

Your tax professional will analyze your situation to find out what consequences you might be facing and how you can take advantage of the IRS’s forgiveness program. You might be eligible for an installment agreement, CNC status, or innocent spouse relief. Alternatively, you could make an offer in compromise or ask for penalty abatement. Call us now at Geaux Tax Resolution in Lafayette, LA to learn more about our tax resolution services.