An individual can face tax-related problems when he is moving into a practical world. Tax is a contribution to state revenue and it is deducted from a worker’s income, business profit, and other ways. Tax problems are common and they can be state, federal, or even international tax issues. Tax enforcement is mandatory and it is implemented by tax authorities. These authorities are responsible for tax collection and tax audits.
Need of law firm professionals
When taxpayers receive a notice related to tax, they shouldn’t panic. The notice specifies whether it is related to a tax return or it is related to the examination of their business that consequently requires a business tax audit. Also, the taxpayers or workers receive notice imposing and threatening their income or notice for their bank accounts. It is wise to look for some help and consult a professional. This is important as he or she will give you professional tax advice, provide you some information and guide you through all the procedures. Their expertise covers many areas like employee share plans, SBCGT concessions, GST, international tax, and more. Click here for creating an employee share scheme.
Potential ways to resolve the tax issue
To avoid any problem or challenging situations everyone has their ways to sort out such matters. Most of the taxpayers deal with their tax-related problems in the following ways.
Paying the tax amount as requested
When the tax-related notice is received by the taxpayer, the taxpayer tends to go through the notice. Some taxpayers do not want confrontation with the tax authority and they end up paying the amount that is written on the notice. It is to avoid problematic situations but actually, it is not always the best option for the taxpayers. It is because the tax bill is sometimes inaccurate and is more than the actual amount.
Paying the right tax amount
The taxpayers who can afford the amount written on the tax and do not want to get involved with the tax authority regarding the tax amount issue go for a payment method. But it is wise to check out the tax amount that you should be paying. It is good also although it involves some procedures and confrontation with the tax authority. Working with the tax authority is a critical step the taxpayers want to subside the penalty evaluated. When you question the tax authority it is necessary to place reasonable cause. It is because the success of the process depends on it.
Using the Installation Agreement method
Sometimes taxpayers are unable to pay the complete tax amount. There is a method that helps in such situations. The taxpayers usually pay the tax amount through an installment agreement. This is also a way to resolve your tax problem when the tax amount is accurate but you can’t make it. In such cases, You should get a professional tax consultant. It is not easy to make deals with the tax authority. The tax authority usually asks for heavy monthly payments, where your tax representative negotiates with them. He will try his best to achieve the most reasonable installation agreement. This will help you in the long run as you can have a peaceful life without any financial and economic pressure.
Using OIC method
Offer In Compromise or OIC is an offer that is given to the taxing authority by the taxpayers to resolve their tax problem. This offer is accepted under certain conditions. The amount provided to resolve the tax problem must be equal to or greater than the taxpayers' Reasonable Collection Potential or RCP. Financial tools are used to determine the Reasonable Collection Potential by the IRS or the sales tax agency. This varies depending on the type of taxpayer i.e whether the taxpayer is an ordinary individual or a business entity. Having a professional guide will help you through these procedures.
Conclusion
So, in a nutshell, people who face any kind of difficulty when they receive a notice from the taxing authority should not panic in such situations. if they are unable to cope with these circumstances they should seek some professional assistance.
