Top 5 Frequently Asked Tax Questions


When most people hear the word “taxes” they cringe a little. We understand. Taxes can be very complicated and stressful. In fact, according to recent research conducted by the Pew Research Center, 44% of Americans say the complexity of the tax system bothers them. If you’re one of the many American’s who struggles to understand the comprehensive nature of the federal tax system, you are not alone and we are here to help.

Due to the complexity of the federal tax system, we receive a lot of questions about individual and business tax debt. Today, we want to share these questions with you and address the top 5 frequently asked tax questions as it pertains to resolving tax debt.


1. Can I resolve my tax debt for less than I owe?

The short answer to this question is yes and no. Yes, the IRS will settle tax debt cases at a reduced amount; however, it’s important to know that not everyone will qualify for debt relief programs. You must apply and meet all qualifications to receive this type of aid. If you think you might meet the qualifications for debt relief, several programs exist.

The first option available to you is the Fresh Start program. The Fresh Start tax relief program is designed by the IRS to help individual and business taxpayers pay back taxes, avoid tax liens and get tax relief from the  IRS. This program has also made it easier for taxpayers to qualify for other debt relief services such as an offer-in-compromise.

An offer-in-compromise is an agreement between the IRS and you to settle a debt for less than the amount owed. Similar to the Fresh Start program, you must meet certain requirements to qualify for the program. In general, for an offer-in-compromise to be accepted, the IRS has to determine they can collect more through the settlement than they can over the life of the remaining collection statute.


2. I didn’t file taxes last year, what should I do?

It is never too late to file your tax returns. If you missed filing taxes this year or in past year’s, it’s important to still file taxes with the IRS. Unfiled tax returns, also known as delinquent returns, are common among taxpayers and viewed as high priority by the IRS.

When you don’t file tax returns, the IRS typically files a tax return on your behalf based on the income they have on file for you. After they do this, they begin the collection process. Because the IRS does not always have the most accurate information about your income, when they prepare your returns (called substitute-for-returns), the balances are almost always overstated.

These incorrect balances can be resolved, but before the IRS is willing to work with you, you must file your delinquent returns. When you do this, the IRS will establish a “goodwill” and help facilitate the resolution of your tax dispute.


3. Can I receive a tax refund if I am currently making payments under an installment agreement or payment plan for a prior year’s federal taxes?

Unfortunately, the answer is no. One of the conditions of your installment agreement is that the IRS will automatically apply any and all refunds due to you against the taxes you owe.

It’s important to note that if you receive a refund, it is not applied toward your regular monthly payments. You must continue to make your installment payments when they are scheduled and in full. Additionally, regardless of whether you are participating in an installment agreement or other payment plan with the IRS, if you owe past-due amounts on things such as federal tax, state tax, student loans or child support, you cannot receive the return.


4. How will removing a tax lien affect my credit and if so, how do I do it?

It’s hard to predict exactly how removing a tax lien will affect your credit score because several factors are involved. It will depend on how old the lien is and what other information, both positive and negative, are on your credit report. Tax liens are considered negative so getting them removed as soon as possible would result in a positive change for your credit score.

Earlier we mentioned the Fresh Start program as an initiative to help individual and business taxpayers get relief from taxes. One of the ways the program does this is by addressing tax liens. In the past, liens stayed on your credit report for seven years from the date they were paid or satisfied. Now, with the Fresh Start program, you can request the IRS to remove the lien if it has been paid or satisfied. This is not something the IRS will automatically do, you must ask.

You can begin the lien removal process by filing out Form 12277 with the IRS to request the lien be withdrawn. If the IRS grants your request, they will file the notice with the office where the lien was recorded as well as send you a copy. In addition to this, you can also request the IRS notify credit reporting agencies, creditors and financial institutions to inform them of the withdrawal.

It’s important to note that while this can be a good option for improving your credit score, be prepared to wait. It can be a long process and it’s important to remain patient and diligent in your efforts as you may face challenges and resistance.


5. What does a tax resolution company do and should I hire one?

Working with a good tax resolution company can be one of the best decisions you make in handling your debt. Tax debt is complicated and the idea of taking it on alone can be very overwhelming. A tax resolution company specializes in tax debt help and can help you with IRS problems and ensure your tax resolution has the best possible outcome.

A tax resolution company can help you with back taxes, audits, tax liens, levies, debt settlement plans and unfiled returns. They can handle the paperwork, applications and communication with the IRS. Most of all, they can give you peace of mind knowing your situation is in good hands

At Landmark Tax Group, we let our customer experiences speak for our service. Here’s what Kasia M. had to say about hiring Landmark:

“We got really lucky when we found Michael Raanan of Landmark Tax Group.  We had heard of ‘Fresh Start’ on the radio and I ‘thought’ I could take on the IRS myself with filling out some forms.  I was sadly mistaken.  I couldn’t find any help online and then I got referred to Michael.  We never met in person because he informed me we could do everything via phone and email but was fine to meet with me if I wanted to.  He always answered my calls or returned them promptly.  Everything was so seamless and easy.  He was able to get some penalties and interest abated for us that I would have never been able to do.  He was able to wipe away $4,000-$4,500 of what we owed the IRS.   He has a way of explaining things so simply and is very patient in explaining even if he had to repeat himself!!    The entire process took 1  1/2 years only because the IRS is way behind, but he was always on top of any pressing matter.  A true professional in every sense of the word. Please feel safe with him for your taxes.”

Not only are we licensed Tax Relief Specialists, we are also former Senior IRS Agents that now serve the best interests of taxpayers like you – all we do is handle IRS Tax Relief matters, all day, every day. Speak to us for FREE at (949) 260-4770.

Contact us now at 1 (949) 260-4770 for a FREE, no-obligation consultation with our CPAs, Enrolled Agents, and former IRS Agents.

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