Owe the IRS? There are options available to taxpayers

Tax day is rapidly approaching. As individuals and businesses gather the information they need to file, they want to be sure that all of their returns are filled out properly. If the IRS reviews their documents, it could mean that they will receive less money back, or potentially have to pay more in taxes.

In some situations, the IRS may notify an individual that he or she did not pay the complete amount of taxes owed. This means that the taxpayer will have an opportunity to challenge the finding of the IRS. If the agency still feels that the amount is valid, they may file a notice of deficiency. This gives the individual a limited time to either pay the amount specified, or challenge the matter in Tax Court.

After a decision by the Tax Court, if the taxpayer is determined to still owe money to the IRS, the agency will begin efforts to collect the entire sum. This may include collection actions, as well as garnishments of wages or liens on property or assets.

If the debt is substantial, it can be difficult to come up with such a large sum of money in a short amount of time. The agency may be very aggressive when trying to collect these debts, and taxpayers need to know about some of the ways that they can resolve their obligations.

One of the methods often used is called an offer in compromise. This is a negotiation with the IRS to have the tax debt be considered paid in full even though only a portion of the amount is repaid.

Special qualifications must be met before an application for an offer in compromise will be considered. The agency will review the taxpayer's financial situation, and decide whether or not to grant the offer. If accepted, the IRS will impose additional requirements on the taxpayer, including obligations to remain current on future tax payments.

It is extremely important that individuals considering an offer in compromise speak to an experienced tax attorney before trying to resolve their debts in this manner. The process can be very complicated, and the agency requires that all procedures be followed properly before the request will be granted.

An attorney who has handled these types of negotiations with the IRS in the past can help make sure that you include all of the necessary information that will help prove you are unable to repay the amount you owe. Working with an attorney will also allow you to ask any questions that you may have, and understand the different options that are available for repaying your tax debts.