Atlanta CPA: Understanding Your Options in Addressing open IRS Monies/Back Taxes

Atlanta CPA: Understanding Your Options in Addressing open IRS Monies/Back Taxes  

Understanding your options is your best option when evaluating how best to address open and unpaid IRS tax issues with the IRS. These articles and recaps will do much to help ensure that you make a wise a prudent choice. Having served as a Gwinnett CPA over a decade I have learned that the best option will always be to retain a CPA who is well versed in such matters and to ensure that you check all of their references. 

Paying the taxes and interest in full along with the interest while requesting abatement of the penalties. This has the advantage of stopping penalties and interest on any paid monies and the potential upside of perhaps a quicker resolution of the open monies. However this requires you to be able to source and full pay the taxes and interest, which may be require more capital than appears immediately available. However borrowing this money from a bank, friends or family might gain you a much lower carrying cost on the open monies and therefore be substantially financially advantageous.  

Submitting an Offer in Compromise is a great option for those who qualify. In general terms to qualify you have to be up to date on all of your current tax filings and obligations and the amount you owe Will need to be more than the total of your net worth and excess cash flow over the next five years. If the IRS accepts your offer in compromise, you will be required to stay current on all personal and corporate tax obligations for the next five years. A typical Offer in Compromise will take between eight to fourteen months to process and you must meet the above criteria or the IRS will not consider your offer. For those who qualify the IRS will reduce the amount owed to what you can afford to pay, using the above, and then typically the IRS will look to have all of the monies paid ASAP after acceptance of the offer. Though the IRS can grant payment terms for up to two years on the monies, I recommend that all taxpayers pay in full, so as to limit any potential of non-payment and voiding of the Offer.  

The third option that is most used to effectively address open IRS tax monies/back taxes is to set up an Installment Plan using IRS Form 9465. The Installment Plan, though often seen as a "quick fix" as taxpayers are able to get on a plan and begin making monthly payments, is frequently the most expensive option as penalties and interest continue to be assessed due and payable on any open monies.  

John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097 Phone 770-814-9304 http://www.hiscpa.com/  http://www.john-dillard.com/  

http://www.hiscpa.com/irs-selection.html  How Audits Are Selected
http://www.hiscpa.com/irs-audit.html  Gwinnett CPA Advises on How to Handle IRS Audits
http://www.hiscpa.com/working-with-the-irs.html  Obtaining IRS Representation
http://www.hiscpa.com/paying-taxes.html  Paying Your Taxes and Extensions
http://www.hiscpa.com/avoiding-audits.html  How to Avoid IRS Audits
http://www.hiscpa.com/offer-in-compromise.html  Offer of Compromise, Back Taxes and IRS Problem Resolution