Tax Resolution—Denver, Colorado
Knowing your options is the first step to federal and state tax resolution
When you’re faced with IRS or state tax debt, you may worry that you’re not managing them correctly or how to move toward tax resolution for you or your Denver-based business. The good news is that there are many options available to taxpayers when it comes to repaying your tax bill. The key is selecting the best one for your financial circumstances in comparison to how much you owe the IRS or state tax agencies.
Here are some common tax resolution options:
An installment agreement is a payment plan that allows you to repay outstanding taxes plus penalties and interest to state and federal taxing authorities. You can choose from a number of payment agreements:
You can set up an agreement that will only end up paying part of the bill you have, known as a partial pay agreement. Or select a streamline installment agreement that allows you to pay your bill within either five or six years.
If you have other debt that will be paid off within a few months or a few years, you can set up an agreement that will allow you to pay a smaller monthly amount up front and then increase it when other debts become paid off over time. This is known as a tiered agreement.
Another option is the full pay agreement for taxpayers who are unable to pay the amount in full within five or six years, but can pay an amount that will allow the tax bill to be paid within the collection time period the IRS has by law (usually 10 years).
Offer in Compromise
An offer in compromise is a settlement option with state and federal taxing authorities. This is the option you often hear advertised on the radio or television and is commonly incorrectly referred to as a “pennies on the dollar settlement.” There are rules and regulations in place that govern if a taxpayer qualifies for an offer in compromise and how much you can settle your tax debt for using an equation.
If you qualify for an offer in compromise and one is accepted, you are essentially on tax probation for a period of five years before you are fully clear of the tax bill.
If you are assessed a tax bill after a tax return has been filed and the bill is the result of your spouse not reporting everything correctly, then you may qualify for relief under the innocent spouse relief provision. This option has a strict timeframe for requesting relief and having it approved. So if you think you may qualify for it, you should contact us today to discuss your options.
If the reasons that you owe federal or state taxes are not intentional or fraudulent in nature, then you might qualify to have some of the penalties removed or abated.
The IRS has strict criteria to qualify for relief of the assessed penalties, but if you were dealing with a circumstance beyond your control that prevented the timely payment or filing of tax returns, this is an option that is worth looking into for you.
The best time to start working toward tax resolution is now.
Explore the True Resolve website to learn more about the tax resolution services we offer you or your Denver-area business and how we can work with the IRS or state tax agencies to address your tax issues.