Tax settlement with the IRS is highly desirable for many individuals. However, it is never an easy task. The IRS is not easy to convince to settle your tax liability. The taxman is always looking to maximize tax revenue, hence, they take a strict view in such matters. At the same time, it is also true that tens of hundreds of tax settlements are reached every year. It all comes down to your individual circumstances and how well you are prepared for it.
The authorities will throw flimsy applications out of the window. However, it may be considerate when it comes to genuine applications. So, make sure your application has some substance before you apply for any sort of tax settlement.
Following are 6 tips to negotiate IRS tax settlement in Pasadena, CA, that may come handy for you.
6 Tips To Negotiate IRS Tax Settlement In Pasadena, CA
Understand Your Financial Situation:
The IRS will never allow any settlement out of the blue. It will carefully analyze your financial situation and make a decision accordingly. So, the first thing you need to do is to understand your own financial situation.
Take a close look at your income, expenses, and assets. It will provide you a rough idea about your chances of a successful settlement. At the same time, it will also help you determine the kind of settlement you can afford. This information also helps you to analyze the terms of negotiations with the IRS.
Be Honest:
Honesty is the best policy. When dealing with the IRS, it may be the only policy that actually works. The IRS has enough resources, data and expertise to see through any misstatement or misrepresentation on your settlement application.
So, at no cost, ever try to provide false documents or information with the hope of winning a settlement.
Providing false information to the IRS can lead to serious consequences, including penalties and interest charges. At times, even unintentional errors may lead you in deep waters. So, make sure your settlement application is free from all material errors and mistakes.
Know Your Options:
Tax settlement is an umbrella term for a number of options the IRS offers to potential candidates. These options may include installment agreements, offer in compromise, and currently not collectible status.
Understand your financial situation, and do a thorough research about all these options. Determine which option may be most suitable for you, as per your financial circumstances.
Consider Timing:
Timing is an important factor in negotiating a tax settlement. For example, if you’re close to the statute of limitations on your tax debt, the IRS may be more willing to negotiate a settlement.
Similarly, if you’re facing financial hardship, the IRS may be more willing to work with you. Moreover, reaching a tax settlement may require a number of weeks.
Keep that in mind as well, as you may start accruing penalties or interest while you wait for a settlement decision.
Get Everything In Writing:
Once you reach a tax settlement with the IRS, make sure to get everything in writing. This includes the terms of the settlement and any deadlines for payment. Keeping detailed records can help you avoid problems down the line.
Hire a Tax Professional:
Negotiating a tax settlement with the IRS can be a complex process. Consider hiring a tax professional who can help you navigate the process. They have the technical knowledge to help you prepare paperwork and choose the most suitable settlement option.
A tax professional can help you understand your options and negotiate on your behalf. Moreover, a tax professional has the expertise to negotiate with the IRS.
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Zee Maq is a content writer who specializes in writing business and finance content. She has nine years of experience and loves to provide problem-solving content to help people tackle challenges in their everyday lives.