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Best Practices for Negotiating With the IRS

Do you owe taxes to the IRS? Do you wish there was a way to resolve your debt and move on with your life?

Resolving your issue may seem nearly impossible if you’re facing IRS debt. The IRS is not known for its leniency and patience, but you still have options.

Keep reading to learn about negotiating with the IRS and getting back on track.

Know Your Tax Situation

Knowing your tax debt situation is an important best practice for negotiating with the IRS. You must be able to identify the specific taxes you owe, and it is beneficial to have any supporting documentation if you can produce it.

Make sure you know your total amount, including late fees, interest, and penalties. Being able to quickly access records and documents shows the IRS you are engaging in the process in an honest and organized way. 

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Click here to learn more about IRS and ask for professional help to evaluate your situation.

Understand IRS’s Goals and Requirements

When negotiating with the IRS, it is important to understand their goals and requirements. The IRS is looking to collect any taxes owed to them, so they need to be encouraged to reach an agreement.

Therefore, it is important to be polite, honest, and respectful. Explain the situation clearly and be prepared to make a reasonable payment plan. Be prepared to back up any past paperwork and be open to potential IRS audit examinations.

Understand the IRS timeframes and filing/payment deadlines and offer alternatives to remedy the situation. Provide as much documentation as possible and stay in contact with the IRS to ensure that all requests are answered promptly.

Lastly, ensure that both parties sign any agreements reached to ensure that all requirements for tax payments, filing deadlines, and future business are met.

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Gather Documentation to Support Your Position

When negotiating with the IRS, it is important to have the right documents to support your position. Before approaching the IRS, gather all relevant paperwork, such as:

  • Income statements
  • Bank statements
  • Tax records
  • Evidence of losses

Having your documents in order demonstrates that you have made an effort to comply with the IRS’ legal requirements and shields you from any accusations of tax negligence.

It also aids in creating a more unified discussion between both parties, as the negotiation process is likely successful when the facts are supported by sufficient documentation.

With thorough preparation, the IRS agent assigned to your case will be able to easily track your claims and how they impact your financial situation. Documenting your support is an essential best practice for negotiating with the IRS.

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Establish and Ask for Fair Agreements

When negotiating with the IRS, it is important to keep in mind the idea of fair agreements. The IRS is willing to establish and agree to different payment plans to help those who might otherwise not be able to pay their unpaid taxes.

It is important to explain your situation in detail, provide supporting documents, and be honest when making an offer.

Before proposing an offer, it is a good idea to research the IRS payment options and understand the tax laws and regulations that might pertain to your situation.

Start Negotiating With the IRS

By following the best practices for negotiating with the IRS, taxpayers can enter negotiations with the confidence that they are doing what’s required of them.

Take the time to prepare fully, research, and consult a tax professional, if necessary. 

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