Tax Problem Resolutions


Every year, countless of IRS proceedings and tax court litigations arise from tax enforcement. Needless to say, the easiest way among tax problems resolutions is to pay taxes. However, although payment of taxes is an obligation each taxable citizen owes the state it can be a burdensome obligation. In fact, there are times that it is so onerous that individual taxpayers could no longer afford to pay for living expenses and corporation taxpayers could go out of business.

Payment of taxes, however, is not the only solution to a tax crisis. There are also other available tax problem resolutions that can be favorable for both the taxpayer and the government. Tax resolutions can be divided into three categories: preventive measures, collection solutions and litigation defenses.

Preventive Measures 

Prevention of tax problems before they come is the best of all tax problem solutions. Not only is it simple, it will also benefit the taxpayer by saving him or her money, time and effort.

  • Return preparation -To settle any taxation liability, filing of any return is not enough for what is required is a "correct" return. One of the ways to ensure that the details in the return are correct is to maintain an updated record of all financial items and transactions. An audit and examination of returns by a professional can also help in accuracy check especially if it involves huge accounts.
  • Prompt filing and payment of taxes -To avoid any tax controversies, the taxpayer must also promptly file returns for the applicable tax year and pay them in full.
  • Tax planning -This method allows the taxpayer to employ legal measures that can minimize the amount of tax due. The simplest and most common individual and corporation resolutions against taxes are the reduction of taxable income by applying lawful tax exemptions and deductions. Taxes can also be paid by means other than direct finances from the taxpayer such as by availing of tax credits and tax deductions.

Collection Solutions 

In enforcing tax laws, the IRS is empowered to undertake its collection remedies against the taxpayer. Such collection actions involve the execution upon the taxpayer's property to satisfy the tax due. There are different tax problems solutions to save the taxpayer's valuable property and assets. Among these are:

  • Removal and/or reduction of tax interests and penalties,
  • Cancellation of levy on real property,
  • Lifting of garnished bank deposits,
  • Discharge of distraint of wage, receivables and personal property and
  • Abatement of tax liens on property.

Litigation Defenses 

The IRS may assess tax returns should they have suspicion as to the accuracy of the figures stated therein. Hence, it may commence administrative proceedings, civil actions and criminal suits against the taxpayer. To obtain relief from these actions, the taxpayer may engage the services of a tax professional like tax attorneys to find adequate tax problem resolutions. Defenses that may be employed by representatives can either be absolute defenses or partial defenses.

  • Absolute Defenses -These lawful defenses, when considered by the court or tribunal, can absolve the taxpayer from the consequences of tax laws violations. Listed below are some of these tax problem resolutions.
  • Bankruptcy,
  • Entitlement to Stated Tax Exemptions and Deductions in Income Tax Return,
  • Expiration of Statutes of Limitations and
  • Tax Amnesty.

  • Partial Defenses - In the absence of defenses that can completely absolve the taxpayer from the consequences of an administrative, civil or criminal suits, there are also tax problem resolutions that though will not free him or her from tax liability, will nevertheless minimize it. Among these are:
  • Claims for tax credit and/or refunds,
  • Innocent spouse relief ,
  • Late filing of returns and payment of taxes,
  • Offer in compromise settlements and
  • Payment plan negotiations. 

In the event that the court of tribunal does not consider any of the tax problem resolutions of the taxpayer, an appeal may still be had for the modification or reversal of the decision.