IRS Resolution FAQ

Q: What is an Offer in Compromise and do I qualify?

An Offer in Compromise (OIC) is an IRS program that allows you to settle your tax debt for less than the full amount owed. The IRS considers your ability to pay, income, expenses, and asset equity. To qualify, you generally must: (1) have filed all required tax returns, (2) have made all required estimated tax payments, (3) not be in an open bankruptcy proceeding, and (4) demonstrate that the full amount is uncollectible. The IRS accepts roughly 40% of OIC applications. We evaluate your eligibility before filing to maximize your chances.

Q: Can the IRS really garnish my wages without warning?

Not without warning — but the warnings can be easy to miss. The IRS must send a series of notices before levying wages, including a Final Notice of Intent to Levy (LT11 or Letter 1058). If you've been ignoring IRS mail, you may be closer to a levy than you realize. Once a wage levy is in place, your employer is required to send a large portion of each paycheck directly to the IRS. We can often get levies released quickly by establishing a resolution agreement.

Q: What is Currently Not Collectible (CNC) status?

Currently Not Collectible (CNC) status is an IRS designation that temporarily stops all collection activity — including levies, garnishments, and collection calls — when you can demonstrate that paying your tax debt would prevent you from meeting basic living expenses. While in CNC status, the IRS suspends collection, though interest and penalties continue to accrue. It's not a permanent solution, but it provides critical breathing room while you stabilize your finances or pursue other resolution options.

Q: What is penalty abatement and how do I get it?

Penalty abatement is the removal of IRS penalties from your tax debt. There are two main types: (1) First-Time Penalty Abatement (FTA) — available if you have a clean compliance history for the prior three years and have filed all required returns; (2) Reasonable Cause Abatement — available if you can demonstrate that your failure to comply was due to circumstances beyond your control (serious illness, natural disaster, death of a family member, etc.). Penalties can represent 20–25% of your total balance, so abatement can significantly reduce what you owe.

Q: How long does IRS tax resolution take?

It depends on the resolution path. Installment agreements can be established in 2–4 weeks. Penalty abatement requests typically take 4–8 weeks. Offer in Compromise cases take 6–18 months from submission to acceptance or rejection. Currently Not Collectible status can be established relatively quickly once we gather the necessary financial documentation. We'll give you a realistic timeline based on your specific situation during your free case review.

Q: What is an IRS installment agreement?

An installment agreement is a payment plan that allows you to pay your tax debt in monthly installments rather than a lump sum. There are several types: Guaranteed (owe under $10K, automatic approval), Streamlined (owe under $50K, minimal financial disclosure), and Full Pay (owe over $50K, requires detailed financial analysis). Interest and penalties continue to accrue during the payment period, but the plan stops active collection. We negotiate the lowest possible monthly payment based on your actual financial situation.

Q: What is an IRS audit and what triggers one?

An IRS audit is an examination of your tax return to verify that your income, deductions, and credits are accurate. Common audit triggers include: unusually high deductions relative to income, large charitable contributions, home office deductions, business losses for multiple consecutive years, unreported income (the IRS receives copies of all 1099s and W-2s), and random selection. Most audits are correspondence audits conducted by mail — not in-person examinations. We handle all communication with the IRS on your behalf.

Q: Can you represent me in an IRS audit?

Yes — and you should never face an IRS audit alone. As an IRS Enrolled Agent, Tiffany Nellums has unlimited practice rights before the IRS, meaning she can represent you in any audit, appeal, or collection matter in all 50 states. We gather all required documentation, prepare your response, communicate directly with the IRS examiner, and fight for the best possible outcome. You don't have to speak to the IRS at all.

Q: What happens if I have multiple years of unfiled tax returns?

Unfiled returns are a serious issue — the IRS can file a Substitute for Return (SFR) on your behalf, which typically results in a much higher tax bill than if you had filed yourself (they don't give you any deductions). The IRS can also assess the Failure to File penalty (5% per month, up to 25%) on top of any taxes owed. The good news: we can get you compliant by filing all back returns, often negotiate penalty abatement, and set up a resolution plan for any resulting balance. The sooner you act, the more options you have.

Question 1

I received an IRS notice — what should I do first?

Answer

Don't panic, but don't ignore it either. Read the notice carefully to identify the type (CP2000, CP504, LT11, etc.) and the response deadline. Never throw away an IRS notice. Contact a tax professional immediately — response deadlines are strict, and missing them can escalate the situation significantly. We offer same-day consultations for urgent IRS matters.

Question 2

What is an Offer in Compromise and do I qualify?

Question 3

Can the IRS really garnish my wages without warning?

Question 4

What is Currently Not Collectible (CNC) status?

Question 5

What is penalty abatement and how do I get it?

Question 6

How long does IRS tax resolution take?

Question 7

What is an IRS installment agreement?

Question 8

What is an IRS audit and what triggers one?

Question 9

Can you represent me in an IRS audit?

Question 10

What happens if I have multiple years of unfiled tax returns?

Question 11

What is an IRS tax lien and how does it affect me?

Question 12

What is the IRS Statute of Limitations on tax debt?

Question 13

Can I settle my IRS debt for pennies on the dollar?

Question 14

What is Innocent Spouse Relief?

Question 15

How much does IRS tax resolution cost?

IRS Resolution FAQ

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