A federal tax audit is a serious matter that needs to be handled in the most professional and swift manner possible. You can not avoid or ignore an audit. If you do not respond to the government’s requests they have the right to determine a dollar amount that they think that you owe and start garnishing your wages in order to collect the amount. The longer that you wait to sort it all out, the more fines and penalties they will assess. And they can levy your bank accounts too. A federal tax audit can destroy the financial security that you have worked so hard to establish if you do not cooperate with the government’s requests. But there are ways that you can legally cooperate with the government and protect yourself and your own interests as well.
A licensed and professional tax attorney will always be your best defense, even if you are in the wrong. If it is established that you do owe the IRS a significant amount of money in back taxes, there are several options available that you can apply for in order to repay the debt. A tax attorney can set up an installment agreement with the IRS for you or work out an offer in compromise plan depending on your personal situation.
Installment agreements are the most popular way that people pay back taxes that they owe. An attorney will be an integral part of coming up with an installment agreement that is acceptable for you and the IRS. There are numerous steps that must be completed before this type of agreement can be reached. An Attorney will guide you through these steps. Once both sides agree to an installment plan, all collection efforts against you will stop. The endless phone calls and certified letters will also cease.
An offer in compromise is another way that you can satisfy a debt to the IRS. If you can not afford to pay the amount of money that the IRS saddles you with after a federal tax audit, you can use a tax attorney to prepare an offer in compromise to satisfy the debt. An offer in compromise is a reduced offer that you make to the government to appease them. They can either except or reject the offer, which is why it is important to work with a tax attorney in coming up with a figure that both sides can agree upon. Once this one time lump sum is accepted and paid, all collection efforts will stop.