What Is Tax Resolution? How to Get Help With IRS and New York State Tax Problems

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. 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, 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.

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.

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.  

Attorney Timothy Hart

Timothy S Hart, the founding partner of the tax law firm of Timothy S. Hart Law Group, P.C. is both a New York Tax Lawyer & Certified Public Accountant. His area of expertise includes innovative solutions to solve your Internal Revenue Service and New York State tax problems, including tax settlements through the Federal and New York State offer in compromise programs, filing unfiled tax returns, voluntary disclosures, tax audits, and criminal investigations. [ Attorney Bio ]