If you have tax debt or are dealing with a tax problem, you may be looking for tax resolution services. Many providers out there offer solutions to help you pay off what you owe or work with the IRS or the New York Department of Taxation and Finance to get out of debt. However, there are companies that make false promises and may not actually do much to help you, but are quick to take a large fee.

Whether you’re looking for help with your business or personal taxes, you need to know exactly what these services entail and what to expect. This guide walks through what you need to know about tax resolution services, IRS resolution options, and how to find a trustworthy tax resolution service provider.

What Are Tax Resolution Services?

Tax resolution services are services that help you resolve your tax problems. When you’re looking for tax resolutions for your pending tax issues, you may be trying to pay off the tax debt you owe the IRS or NYS, get penalties waived, or resolve some other tax-related dispute or problem.

If you need these services, you should look for a tax pro that specializes in this aspect of the tax landscape. For instance, if you work with a tax professional who simply prepares your tax return, they likely won’t be able to help you with tax resolution because they may not be familiar with dealing with tax debt, collection appeals, settlements, and other options.

Find a tax resolution firm that offers the services you need. Always be careful who you work with, and do plenty of research before you pay them or sign anything. We offer a Free Consultation so you can get to know us before paying anything. 

You may have found yourself unable to pay your taxes and you have been bombarded with tax assessments and notices, and living in the constant fear of a bank levy or wage garnishment. Now you feel you can make some token payments but you are not sure how to go about this, and even if the IRS will accept this and cease their incessant contact.

You are definitely on the right track in not just trying to avoid your tax obligation because of your financial situation. However arranging suitable IRS tax payment plans or filing an offer in compromise may not be as easy as you anticipate. You may want to consider having an expert tax attorney do the payment negotiation for you.

To begin with, it wouldn’t hurt to have a review of the tax issues to ensure that they are accurate. You are probably assuming that the amount the IRS or NYS is stating that you owe is factual. Either you or the IRS could have made a mistake with respect to the amount owed, and it would be to your benefit to know this as it could reduce your tax debt. Depending on your specific circumstances, a professional tax negotiator may be able to have some of your debt reduced as there are allowances within the tax laws for special circumstances. What you may not realize is that the IRS agents have the authority to negotiate tax matters such as this. They are not bound by hard and fast laws that do not allow them to view each taxpayer’s situation as an individual matter.

Then it also has to be determined if you can qualify for IRS tax payment plans, or some other form of permanent relief. For example, if you are not up to date with the filing of your tax returns then you may not qualify. Or if you owe too large an amount, then negotiating your payment plan becomes far more complex, and you may have to produce a great deal of financial information. Arranging IRS or NYS payment plans can quickly become complex and this creates even more stress. By allowing a professional to negotiate on your behalf you are not going to have to deal with these issues and your tax attorney will know what you are capable of handling comfortably by way of installments.

Something else you must consider as well is taking a close look as to whether an IRS or NYS tax payment plan is the best option for you. Most likely being a responsible citizen you want to pay your tax bill and it is not your intention to try and get out of your financial obligation. The interest and penalty charges continue to accrue on the unpaid amount of your tax bill and it can take years to try and clear this debt.

Perhaps you have a friend or have heard of others that were able to negotiate an IRS payment plan on their own and it has worked out well for them. What you may not realize is that every tax situation is unique and their success does not necessarily mean this option will be the solution for you.

Your best strategy for getting control of this financial burden is to consult with a professional tax attorney who will review your entire situation and advise you as to your best options. He will assess your financial situation and then once he is totally familiar with you tax case he will negotiate the best solution for you with the IRS or NYS Tax Department. This way you have made every effort to address your tax situation and you don’t have to worry about the legal ramifications of this debt. You will finally be back in control of your tax situation, and know that the best solution available has been negotiated on your behalf by your tax attorney.

Types of Tax Resolution Services

IRS tax resolution works in a few different ways. Maybe you decide to set up a payment plan to deal with your tax debt. Or, perhaps you want to apply for a waiver when you receive a tax penalty for a small mistake. Professionals and companies may offer help with these kinds of solutions. Here are the main types of resolution services:

Audit Representation

Audits may be rare, but they do happen. If you’re facing an audit as an individual or business, you may have no idea how to proceed. It can be pretty daunting to find out you’re being audited.

Tax resolution providers can help you through this process by providing audit representation. They’ll help you understand tax laws and relevant audit processes so you can take all the right steps and resolve the issue as fast as possible.

Unpaid Taxes

Tax debt is very common. Many people can’t afford to pay off what they owe in one lump sum, or a financial hardship may prevent them from paying at all. Tax resolution service providers can step in and help you understand your options with unpaid taxes and take necessary actions to avoid penalties and stay in good standing with the IRS. You may have unpaid taxes due to filing and not paying, or because you underreported your income and the IRS sent you a Notice of Deficiency.

Offers in Compromise

Many taxpayers try for an offer in compromise when they can’t pay their tax bill in full or through monthly payments. With this avenue, you send an offer to the IRS that reflects an amount you can actually afford. If the IRS accepts your offer, you get to pay off your tax debt for less than you owe.

Tax professionals can help you navigate this offer process and follow all applicable regulations and processes.

Currently Not Collectible (CNC)

The IRS may decide to change the status of your account to currently not collectible (CNC) if you are dealing with a hardship that gets in your way of paying what you owe. You will send in information about your situation to the agency, and they make a determination. However, CNC status is only temporary, and you still eventually have to pay your debt.

Many tax resolution specialists provide help in determining if this is the best course of action for you.

Installment Agreements

Companies that offer tax resolution guidance may suggest you work out a payment plan, or installment agreement, with the IRS. These arrangements allow you to make affordable monthly payments over a set period of time to pay off your tax debt, instead of paying it all in one lump sum.

Trust Fund Recovery Penalty

Employers essentially hold employees’ funds in trust before they make the necessary federal tax deposits for their employees. However, if employers don’t deposit these taxes, the trust fund recovery penalty may apply. These situations are potentially serious and can get confusing quickly. Some companies and firms offer guidance when dealing with employer-related tax penalties.

Failure to File or Pay Penalties

If you fail to file your tax return or pay by the tax deadline (which is April 15 unless it falls on a weekend), you could incur a failure to file or failure to pay penalty from the IRS. You will receive a notice in the mail informing you of this penalty.

However, you may have options for getting initial penalties waived, which you can talk through with a tax professional.

Tax Liens

You may have to deal with tax liens from the IRS when you owe money. A lien is the claim the IRS makes against your assets when you fail to pay what you owe. The lien could be placed on your real estate property or financial assets, for example.

These situations can be overwhelming. Many tax solution providers offer assistance in helping you pay off your debt or take other steps to deal with a tax lien.

Tax Levies

A levy is related to a lien but takes things a step further. While the lien is a claim against your property, a levy allows the IRS to seize said property to satisfy the debt you owe the government. This could mean the IRS takes your wages, real estate, or vehicle. It’s a good idea to talk to a tax expert if you’re in this situation.

State Tax Issues

Tax problem resolution isn’t just reserved for federal taxes. Issues can arise at the state level too. You may decide to work with a state tax resolution company that is located in your jurisdiction and understands local tax laws that you must follow carefully. For example, if you have NYS tax problems, you want to hire an attorney who has experience dealing with personal and business taxes in New York State.

How Does Taxpayer Representation Work?

As a taxpayer, it’s your right to have someone represent you when you’re navigating an IRS issue. You can have a preparer file your return or you can work with a tax attorney to help you get through a tax problem.

However, remember that you are trusting your authorized representative with your sensitive personal and financial information. Only work with and trust someone who has expertise and credibility.

Typically, your representative will be a CPA, tax attorney, or someone called an enrolled agent (EA). This person represents you in all matters with the IRS, including communications, providing documentation and evidence, and entering agreements on your behalf.

To make this possible, you need to complete Form 2848, Power of Attorney and Declaration of Representative, which gives the person of your choice the power to deal with the IRS on your behalf.

Aside from individual CPAs, EAs, and attorneys, tax resolution companies out there may have these experts on staff. However, be cautious about working with these companies who may be misleading about how they can help you. They may just end up selling your case elsewhere.

Tips to Finding a Trusted Tax Relief Solution

Reliable tax services do exist. Do your due diligence when looking for the right company or service provider. These strategies will help you watch out for fraud and find tax relief firms you can count on:

1. Identify Your Needs

Carefully assess your situation and your unique tax problem. Look through available IRS resources and documents to figure out what kind of process is involved for your tax issue. Tax resolution organizations can help with several areas, including completing and filing forms, navigating requirements, and negotiating with the IRS.

Figure out what you need assistance with before starting to look for the right tax relief solution. Make sure you find a provider that has expertise in that area.

2. Be Wary of Empty Advertisements

You may get a lot of messaging about tax relief programs and claims that a certain company can help you get your tax debt forgiven. Be cautious before proceeding with these companies. They should really be saying that they can assist you with IRS relief options, as those are the only options you have when dealing with a tax issue.

3. Look Beyond the PTIN

Anyone who prepares taxes needs to have an IRS preparer tax identification number (PTIN). However, this number on its own doesn’t mean you should work with them. Check their credentials and past experience, and read reviews or testimonials if available.

The IRS also has a database—the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications—which provides information about professionals with PTINs who have IRS-recognized credentials. For example, the American Society of Tax Problem Solvers (ASTPS) offers a certification program and training resources for tax professionals, so a tax relief provider having this credential could be a good sign.

4. Watch Out for Tax Scams

Tax-related scams continue to be a major issue every year. Common scams include receiving text messages or voicemails from people claiming to be IRS representatives; any kind of contact that demands you to act immediately; emails or other messages that ask for your personal information, like your Social Security number; or scam mailings that tell you you’re owed a refund when you’re not.

Fraudsters try to impersonate the IRS and may even use phone numbers, email addresses, and logos that appear to be legitimate at first glance. Some fraudsters use the pandemic relief programs to scam you. Others may claim that they can help you get tax debt relief, which is a common one during tax season. Anytime you think a message is suspicious, it is probably some kind of scam, so never give out your personal information or engage.

5. Pay Attention to Fee Structures

The Federal Trade Commission (FTC) suggests that you avoid companies that ask you to pay everything upfront. This is usually unreasonable and a sign of a problematic company. Always ask how you will be billed before you decide to work with a tax resolution pro.

6. Report Issues with Tax Companies

The FTC has a resource where you can report tax relief scams or illegitimate companies. Report any problems you have to alert the government at reportfraud.ftc.gov/. You can also reach out to a tax attorney to talk about your options when you have done business with a tax resolution company that turns out to be problematic, especially if working with them has impacted your standing with the IRS.

7. Negotiate with the IRS on Your Own

There is no law that you have to have representation or assistance when dealing with the IRS. You can negotiate and communicate with the agency yourself. More minor issues, such as dealing with tax penalties or setting up an installment agreement for making payments, can be simple to execute on your own following guidance by the IRS.

Consider this route if you understand your issue and how to resolve it. You can end up saving money on services that you could easily do yourself. However, the more complicated your issue is, the more likely you are to help professional help.

Get Reliable Tax Relief Assistance

One of the best steps you can take when you need tax help is to work with a tax attorney. Tax attorneys know the law inside and out and can help you assess your situation, communicate with the IRS, and set up a plan that works for you. Don’t just click on the first result when you search “tax resolution near me.”

IRS tax resolution doesn’t have to be stressful when you work with Timothy S. Hart Law Group. Our tax attorney will work with you to get your tax issue resolved and will work to protect your rights.

Reach out to Timothy S. Hart Law Group today to get started with the tax resolution process and to access services you can trust.

 

Form 2848 and Its Significance in Managing IRS Representation

 

Introduction

The Internal Revenue Service (IRS) is the federal government agency entrusted with the oversight of the United States tax regulations and the collection of taxes. Dealing with the IRS can be a complex and sometimes daunting process, especially for individuals and businesses facing tax-related issues. However, the IRS provides mechanisms to ease this process, such as Form 2848, a crucial document that authorizes an individual to act as a representative on your behalf.

In this article, we will dig into the intricacies of Form 2848, its significance in managing IRS representation, and the necessary steps in its completion. Additionally, we will explore related forms, such as Form 8821 and Form POA-1, to provide a well-rounded understanding of how these forms play a role in facilitating tax-related matters.

Understanding Form 2848

Form 2848, officially titled “Power of Attorney and Declaration of Representative,” is a document provided by the IRS that is a powerful tool for managing your interactions with the agency. It allows you to designate a representative, an individual, or an organization to act on your behalf in dealings with the IRS.

 

Form 2848 consists of 7 distinct parts, with each section addressing a different aspect of the agreement:

• Taxpayer Details (Section 1): This section requires you to provide your personal information, including your name, contact details, Social Security number, and tax ID number. This information is vital to establish your identity and connection to the tax matters.
• Representative(s) (Section 2): In this section, you specify the representative(s) you are authorizing to act on your behalf. It includes providing their name, contact information, and tax ID number.
• Tax Matters (Section 3): Here, you specify the tax matters for which you authorize the representative(s) to act on your behalf. This section outlines the scope of the authority granted to your representative.
• Acts Authorized (Section 4): This section allows you to specify the actions the representative(s) are authorized to perform on your behalf. These include negotiating, signing agreements, and representing you in IRS proceedings.
• Retention/Revocation of Prior POA(s) (Section 5): You can use this section to specify whether any prior Powers of Attorney (POAs) are being revoked or retained. It’s essential to maintain precise records of your representation status.
• Signature(s) (Section 6): In this section, you, as the taxpayer, must sign and date the form. Additionally, any representative(s) you authorize must also sign and date the form, acknowledging their responsibilities and duties.
• Declaration of Representative (Section 7): The representative(s) must sign and date the form, officially accepting their role and responsibilities as your designated representative. This section underscores the legal obligations and duties of the representative.

 

Defining the Scope of Authority

One of the most critical aspects of Form 2848 is the ability to define the scope of authority granted to your representative. It is determined by how you fill out line 3 in Part I of the form. The accuracy and specificity of this section are crucial. When completing this section, you must specify the precise issue(s), the types of forms involved, and the year(s) this authority applies.

Failure to populate line 3 accurately or the use of overly broad terms, such as “all taxes” or “all years,” can result in the IRS rejecting your Power of Attorney request. Therefore, it’s essential to exercise precision and clarity when determining the scope of authority. It ensures that your representative can effectively address specific tax matters.

Electronic Filing of Form 2848

In today’s digital age, the IRS has streamlined the process of filing Form 2848 by offering a convenient and secure electronic filing method. This electronic submission method not only expedites the process but also enhances security and reduces paperwork. Here are the steps involved in electronically filing Form 2848:

• Access the IRS Online Portal: Visit the IRS online portal designated for Form 2848 submission.
• Secure Access Credentials: To log in and use the electronic filing system, you’ll need Secure Access credentials. These include a username, password, and security code. If you don’t have these credentials, you’ll need to create an account. This procedure guarantees that only individuals with proper authorization can access and submit these essential tax documents.
• Form-Related Questions: The electronic platform will lead you through a sequence of inquiries about the particular form you are submitting. This step is crucial in ensuring that the form is accurately completed and submitted for the intended purpose.
• Single Document Submission: It’s important to note that only one document can be submitted at a time using the electronic filing system. This limitation ensures that each submission focuses on a specific tax matter or issue.
• Verification of Information: Once you’ve provided the necessary information and answered the form-related questions, the system will verify your identity and the accuracy of the information provided.
• Uploading Your Signed Form 2848: Upon completing the verification process, the system will prompt you to upload your signed Power of Attorney Form 2848. It is a crucial step in confirming your intention to authorize the designated representative(s) to act on your behalf.
• Confirmation Number: Upon successfully submitting your documents, the IRS will send a confirmation number to the email address you’ve provided. This confirmation number serves as evidence of your submission. You can reference it in case of any inquiries or follow-up actions.

 

Form 8821 and Form POA-1

While Form 2848 is a significant document for authorizing representatives to act on your behalf, it’s essential to note that other related forms serve different purposes within tax management.

Form 8821

Form 8821, officially known as the “Tax Information Authorization,” is another document the IRS provides. Unlike Form 2848, Form 8821 does not authorize an individual to represent you before the IRS. Instead, its primary purpose is to allow individuals or entities to access and receive confidential information about your tax return.

Tax professionals, including certified public accountants (CPAs) and tax preparers, often use this form when they require access to your tax information for the accurate preparation of your tax return. It provides a mechanism for these professionals to retrieve necessary tax data without granting them the authority to act on your behalf in dealings with the IRS. Form 8821, like Form 2848, requires accurate completion and authorization to ensure that tax information is shared only with authorized parties.

Form POA-1

Form POA-1 is the New York State equivalent of Form 2848. It serves a similar purpose, allowing individuals to authorize representatives to act on their behalf in dealings with the New York State Department of Taxation and Finance. The form, just like Form 2848, collects critical information such as your name, contact information, tax ID number, and the name and contact information of the representative(s) you wish to authorize.

Additionally, Form POA-1 requires you to specify the tax matters for which you authorize the representative(s) to act on your behalf. This form is crucial for individuals and businesses based in New York who need representation and assistance with state tax-related matters.

Conclusion

In summary, Form 2848 is a powerful document provided by the IRS, enabling individuals to designate representatives to act on their behalf in dealings with the agency. It is a well-structured document with seven distinct sections that address various aspects of the agreement. Accurate completion of Form 2848 is essential to ensure that your representative(s) have the authority to address specific tax matters effectively.

The ability to define the scope of authority in line 3 of Part I is a critical aspect of Form 2848. Precision and clarity are necessary to avoid issues with the IRS rejecting your Power of Attorney request. The electronic filing of Form 2848 has made the process more convenient, secure, and efficient, with a clear verification process and the issuance of a confirmation number for your records.

Additionally, Form 8821 serves a different purpose by allowing authorized parties to access confidential tax information without representation authority, making it valuable for tax professionals. Form POA-1 is the New York State equivalent of Form 2848, providing similar representation authorization within the state.

In navigating the complex landscape of tax matters and IRS interactions, understanding and properly utilizing these forms and finding the right tax attorney is crucial. Whether you need representation, tax information access, or have specific state-related tax matters, these forms play an essential role in ensuring that your interests are properly represented and protected within the bounds of tax regulations. Please contact us today for more information.