While most Americans don’t enjoy having to work with the IRS on any issues, some of those issues are simply too complicated for the average taxpayer to successfully manage on their own. In this case, a tax attorney can be the best investment the taxpayer will make. Read on to learn five times you might have an IRS problem and need the help of a skilled tax attorney.
1. Filing Old Tax Returns
Have you neglected to file income tax returns (or business tax returns) for more than a year? Then you face two challenges. First, you must actually complete the returns, which may be complicated. It often involves tracking down income and expense documents from prior years and ex-employers, filing past forms and tax rules, and possibly filing on paper rather than electronically.
The second problem you face is getting any refunds due or paying tax bills that now include interest, fines, and penalties. An attorney can help a taxpayer with everything from reconstructing old business records to finding old forms to use and negotiating over penalties.
2. Making Offers in Compromise
An offer in compromise can be an excellent tool for those who owe back taxes they cannot afford to pay or with which they disagree. An offer in compromise involves the taxpayer offering a lump sum to the IRS instead of the full amount. Unfortunately, many offers in compromise are rejected. In 2019, the IRS rejected an estimated 67% of all offers. Working with a skilled tax attorney increases your chances of success.
3. Resolving Tax Disputes
Many taxpayers each year receive and respond to basic notices from the IRS. These notices can range from correcting simple math errors to including income you forgot about, and you can usually handle these notices relatively quickly.
But what if you disagree with the tax agency’s conclusions about what you owe? The longer a dispute goes on and the more money that’s involved, the more you need professionals to help you negotiate with the tax agency for a positive outcome.
4. Seeking Innocent/Injured Spouse Relief
The IRS offers help for taxpayers who file jointly with a spouse who has their own tax issues. Innocent spouse relief is the method by which you may be able to separate yourself from tax responsibility for a spouse who failed to declare income, incorrectly claimed deductions or credits, or committed fraud. Injured spouse relief helps a spouse get back their portion of a refund used to pay their spouse’s debts.
Both injured and innocent spouse relief often involve significant tax relief, but you’ll need to separate many elements of your joint tax return, provide statements and evidence supporting your request for relief, and possibly work with an agent. The best path to success is with the aid of an attorney who has experience with this.
5. Setting Up a Business Correctly
The way you set up a business will have a wide variety of financial and legal implications, including those with the IRS.
Proper business entity choice, formation, documentation, and business procedures shield you from personal liability, minimize taxes, avoid tax law violations, and can easily sell or wind down your business later. New business owners or those who buy a business should consult with an experienced attorney in their state to achieve this.
Could you use help with any of these tax issues? No matter whether it’s a matter of ongoing tax disputes, bringing your taxes current, or avoiding tax trouble in your business, Wiesner & Frackowiak, LC can help. Call today to learn more about our tax services and how we can help with your challenging tax situation.