Reducing Your Tax Liability

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You May Not Owe So Much Income Taxes

Contrary to claims made by unscrupulous marketing companies masquerading as legitimate tax resolution firms, the principal debt that you truly owe the IRS cannot be reduced. Under certain circumstances, the IRS may settle for less through an
Offer in Compromise. However, if you have unfiled returns dating back two years
or more, there may be another way to reduce the principal debt that the IRS
“claims” you owe.

Most people do not know that if you do not file a tax return, the IRS will wait
approximately two years to file a tax return for you. The created tax return is
called a “Substitute for Return.” When the IRS files this type of tax return
for you, they do not consider any of your deductions, dependents, write-offs,
or exemptions that you may be eligible to claim. In other words, you are not
getting “your day in court” to defend yourself. In almost all cases, these
Substitute Returns will grossly inflate your tax debt.

For example, if you sold stock or bonds before 2011, the brokerage filed a report with the IRS. It only reports the total sales price and does not list your cost basis
(how much you paid for the stock). If you are a business owner or are
self-employed, the IRS does not include any business-related expenses that are
tax-deductible. If you paid mortgage interest, you lose that deduction. If you
had un-reimbursed employee expenses, a casualty loss or high medical expenses,
you lose those.

The IRS then takes the total gross income reported to them, applies for one exemption, and then uses it as your taxable income figure. As a result, the IRS will assign an inflated tax debt against your social security number and quickly start the
collections process. The IRS may also report this inflated Adjusted Gross
Income to your state tax authority. Then they will also use these inflated
numbers to prepare substitute returns. In many instances, the inflated income
figure places you into a higher tax bracket, resulting in an even higher tax
bill. The only way to reduce this tax debt is by filing your valid returns over
the IRS substitutes.

It is your right as a taxpayer to have TAX REP PROS LLC file a valid tax return on your behalf to replace the Substitute for Return that the IRS filed for you. Once the IRS receives and processes your new tax return, they will void the one they created. By law, the IRS must allow you to file over these Substitute Tax Returns. The IRS then
zeroes out the debt and will calculate the tax, penalties and interest based on
your new and valid return. In many cases, the outcome is little or no debt, and
there may even be a refund coming to you! If the IRS owes you a refund, they
will place it against any outstanding debt and send you a refund for the rest.

Fortunately for taxpayers, Tax REP PROS LLC can prepare multiple years of tax returns in a matter of days. We can help you prepare proper returns and
make sure you do not pay the IRS $1 more than is necessary. IRS collections are
under no obligation to explain your rights. Their primary goal is to collect
the debt. Technically speaking, you can leave the IRS Substitute Return as is.
But in nearly every case, it is beneficial to file your valid tax return.

Do not fall victim to IRS persuasion. Do yourself a favor and call Tax REP PROS LLC to determine the best way to handle your case.