Tax Attorneys Present Strategies for Dealing with the IRS to Help Resolve Tax Problems

Aug. 31, 2010 - PRLog -- Tax attorneys have seen an influx of new challenges in representing taxpayers in 2010. With the recent healthcare reform, first time homebuyer credit, and expanding “tax gap,” the IRS is increasing liens and levies more than ever. After an individual encounters an issue with the IRS, there are specific steps he or she can take to significantly impact their outcome.

Why are these new challenges coming forth now? The IRS has new responsibility for monitoring and enforcing compliance with individual and employer insurance mandates – meaning there are new penalties for the IRS to enforce, and more ways for the taxpayer to make mistakes.  

Moreover, tax attorneys are facing new issues as well. Generally, there has been a decline in level of IRS service since 2004, making it increasingly difficult for a taxpayer to deal with tax issues themselves. Tax issues are increasing as well – since 1999, liens filed increased 475% and levies have increased 600%. Meanwhile, accepted Offer in Compromise agreements have decreased 72%.

The worst thing a taxpayer can do is to procrastinate once they have been contacted by the IRS. With all recent changes, the IRS has stiffer penalties for failure to file or pay taxes, which will increase the longer the delinquent taxpayer delays. The earlier a problem is handled and negotiated with the IRS, the better the outcome will be.

There are alternatives if a taxpayer cannot pay their tax liabilities in full. The IRS does allow payment over time, and in some circumstances, abate penalties or settle some of the amount owed. These agreements often require the assistance of a professional, as most programs depend on a detailed financial review and heavy negotiation.

Install agreements and partial install agreements allow full payment within an installment plan. These plans require a range of financial information to support a request to the IRS.

Offer in Compromise (OIC) is another solution to resolving tax debt, when there are certain circumstances: Doubt as to Collectability, Doubt as to Liability, and Effective Tax Administration. This requires a full review from the IRS.

Currently Non-Collectible Status is an alternative to an OIC, should the IRS not accept the compromise. Bankruptcy is also an option for certain tax conditions, including individual income tax and single business tax. Finally, penalty abatement is another option for taxpayers with a reasonable cause, such as job loss or home foreclosure.

Lothamer’s tax attorneys have been negotiating tax issues for clients for more than 30 years. With these strategies, taxpayers with issues can decide the best option for them. With full negotiation handled by a tax attorney, taxpayers often see the best result. For more information, visit http://www.lothamer.com.

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Lothamer is a professional firm of Certified Public Accountants founded by in 1978. The firm specializes in Tax Representation and Tax Problem Resolution, and has helped thousands of clients settle their tax problems with the IRS and State of Michigan.