Blog by BR Accounting and Tax Service

Getting into Compliance with the IRS

  • BR Accounting And Tax Service

I hope you have managed to stay safe and well! We focus on resolving tax issues in Prince William County and throughout the lower Northern Virginia area.

Are you aware of what compliance means in the eyes of the IRS? Full federal tax compliance entails both the filing of the necessary tax returns (1040, 1065, 1120S, 1120, 990, 941, etc), and paying all taxes when due. Sounds simple right! Well until you realize that whether you’re an individual taxpayer with a business or not, you need to have remitted the proper estimated amounts to the U.S. Treasury each quarter (currently April 15th, June 15th, Sept. 15th, and Jan. 15th – currently Congress is seeking to make the quarterly payments coincide with the quarters as we know them). Compliance goes a step further for the taxpayers that already have tax resolution agreements in place with the IRS. Those taxpayers must not have a balance due upon filing there individual/joint tax returns or risk violating the agreement, and having any agreed upon terms tossed out the window and they’re forced to start back at square one.

Here is what you need to do to get into “compliance” with the IRS. Remember you can’t have any debt forgiven until you get into compliance.

  1. You should almost always file your past due tax returns, but there are some exceptions and filing needs to be done carefully so additional debt is not triggered, and ensure that assets are not unnecessarily placed in harm’s way.

    Before any debt can be forgiven, the taxpayer needs to get into compliance. This means all past due returns must be filed. You don’t have to pay off all your debt at this time; we’ll talk about what you may or may not need to pay in another blog. However, there are a couple of really big “if’s” when it comes to this step. In rare situations, filing can trigger more debt. Also, filing a particular way can also trigger more debt. All the more reason, why it makes more sense to get a tax resolution professional involved in every step of this process, so they can keep you out of more trouble than you’re already in.

  2. Pay your current taxes.

    While you don’t have to pay all of your old IRS debt, you do have to be paying in your current taxes. This is part of getting into compliance. You need to be able to show the IRS that you can pay your taxes that are current. This will lead to the IRS being more open to various agreements

    This means that if you have a job as an employee, withholding is being withheld from your current paychecks. Or, if you’re an entrepreneur taking draws, that you are currently making your estimated tax payments. If you’re unemployed, we can show the IRS that you’re currently not collectible (through calculation and procedure).

    To get started on your resolution, please contact us to arrange for a convenient time to discuss your specific tax situation. We will handle your situation with the utmost professionalism. We’re to help when you need us.