The first step we take when a client comes to us in Orange County with tax debt, is to find out from the IRS if they are tax compliant. The reason we need to find out if our client is tax compliant, first, is because the IRS will not accept any offers to resolve your back taxes until you are in full compliance with the tax law, and not accruing new tax debt.
So, what is tax compliance?
Tax Compliance in the eyes of the IRS is:
- All tax returns for the prior 6 years have been filed
- Taxpayer is making sufficient payments toward current tax year through either paycheck withholdings or estimated tax payments
Once you are tax compliant with the IRS, we can then work on resolving your back taxes. We have the options of either settling for less than you owe with the IRS through what called an Offer in Compromise, if you qualify, or obtaining an affordable payment plan. Either route we decide to choose based on your situation, we will need to be in compliance before we do so.
Another important thing to note, is that once you have reached a deal with the IRS to resolve your back taxes, you will need to maintain tax compliance. If you fall out of compliance, the IRS can rescind any prior deal for a settlement or payment plan, and the whole process will have to start over.
We can’t stress it enough how important tax compliance is. So, once you have become compliant with the IRS, STAY IN COMPLIANCE!
If you are looking for some help with your tax situation, or getting into tax compliance with the IRS contact our office in Orange County, CA today.
Anthony Fontana EA
4630 Campus Dr #203
Newport Beach, CA 92660