IRS Tax Relief is Not a Given

You must not take for granted that you will reach a tax resolution to your liking, just because you solicited the tax help of a CPA or an IRS tax attorney. As I said previously, these professional guys may be able to postpone IRS collection actions such as IRS levy, wage garnishment, property seizure and possibly tax lien. But the ultimate deliverable is an IRS settlement that provides the tax relief that you need.

I said that we must file first the unfiled tax returns. Even those returns that are filed by the IRS which they call SFR's must be filed all over again. You will benefit from the refilling most of the time. The guys that benefit the most from filing the SFR's are those who are in a business that has a cost of goods sold. In other words people who buy material to produce revenues.

The reason that those people benefit the most from converting the SFR's, is because when the IRS prepares the unfiled return they don't take into consideration such cost, which is usually substantial and account for a lot of the gains or the losses and hence the tax debt.

After your CPA or your tax attorney do the taxes, you file them with the IRS. The unfiled returns usually take less to be assessed than the SFR's. The latter may take as long as four months. Assessing the taxes means receiving a bill form the IRS. The bill may have a threatening tone, but it is a bill. Threatening or not, this is the one that you are waiting for.

Now the fun begins, if you owe large amount such as a hundred or two hundred thousand dollars, you must prepare  a package, the purpose of which is to show the IRS your net cash flow and your net assets. This package will determine if you can make an offer in compromise, be declared as currently not collectible, or the best you can do, and you hope for, is an installment agreement. And I say "you hope for" with regards to installment agreement because it is not the best outcome of the three tax resolutions mentioned in this paragraph.

All tax resolutions are fraught with twists and turns. That applies to the offer in compromise as it does to the installment agree. For example, you may provide the perfect package that proves you have  no assets or residual income to pay the IRS back taxes. You would think that now you can finally get the tax relief that you aspired for.  Not so fast, the IRS can find something in the past to come and haunt you. You may have had some money three years before when you still owed back taxes. They will ask you what you did with the money and why you did not pay them. If your answer is no good, then you may lose the offer.

The installment agreement may pose a problem. If your expenses is prepared according to the IRS standards whether local or national standards, you may be in for a surprise, if your actual expenses are higher than the national standards. For example, if your mortgage is three thousand dollars and the standard is seventeen hundred dollars, then the IRS will ignore the actual payment and will arbitrarily ask you to pay thirteen hundred dollars more than you can afford. The final resolution to this dilemma will depend on both the IRS manager you are dealing with and the skill of your CPA or the IRS tax attorney.