How to Deal If You Married into Tax Problems

If you know there are IRS problems in your future spouse�s past, then they could become yours too. Here are a few things you can do to help minimize your involvement from the underreporting or over deducting that your future spouse has done. You don't want to settle tax debt that's not yours.

Joint accounts must be avoided.

It is best to keep separate bank accounts because the IRS can seize a joint account as payment for your spouse's tax debt. The best way to avoid this situation is by having separate accounts because your money's recovery will be a long process.

Assets shouldn't be co-owned.

You should be the sole owner of assets purchased prior to and during the marriage, which means they must be titled only to you. If your spouse's name is not on it, then the IRS can't seize it to pay for your spouse's tax debt.

A prenuptial agreement must be considered.

If you reside in a community property state, a prenuptial agreement is a good way to protect your properties. With the assistance of an attorney, your interests are protected from community property laws.

Tax returns must be filed separately.

Though you will pay higher taxes when you file separately, you will not be liable for your spouse's IRS issues and the IRS cannot get payment out of you for your spouse's debt.

How Audit Tips Can Help Your IRS Problems

If you have IRS problems, one piece of mail you do not want to get is a notice saying that you are being audited. Don't be alarmed if you get one. You can breeze through your audit and leave your issues behind with these tips:

• You'll receive a bill next time if you don't reply to the notice in a certain amount of time, typically 30 days.
  
  
• The items and documentation you need to prepare will be on the notice so follow the directions provided.
  
  
• Organize the documents required for the audit to save you and the auditor time.
  
  
• Records missing? If you determine that some records are missing, ask for duplicates now! Having missing documentation will delay the process. You'll need records to support your case. The auditor will not get the records for you. This is your responsibility.
  
  
• Only bring the requested records to the audit. Extra documents shouldn't be brought to the audit. If they ask something that was not requested, tell them that it's at home. Hopefully, they will drop the issue.
  
  
• It won't help your situation if you attend the audit angry. Be calm.If you are courteous and polite, the audit is a piece of cake and the auditor will be more likely to see things your way.
  
  
• Don't bring original documents.Present duplicates of the documents to the auditor. If you give the originals to the auditor and they get lost, there's nothing you can do to get them back. Ask the auditor to make copies for you. Take the originals with you after the audit.
  
  
• Keep what you say at a minimum. If possible, only reply with a "yes" or a "no". You provide the auditor a reason to require more documentation if you provide unnecessary information. For example, if you have just purchased a new car or a home, it might be an indication that you've increased your income. You might be investigated further.
  
  
• Know your rights.As a taxpayer, you do have rights. It's best to settle at the audit, but you have the right to an appeal, if needed.
  
  

Finding a Reliable Tax Lawyer

If your IRS issues have led to a dispute and you haven't been able to resolve them, you may need to confer with a tax lawyer. These IRS problems could be a result of an audit, from impending asset seizures, tax issues with your business, or from being self-employed, or many other scenarios. Searching for guidance before your tax liability grows because of additional penalties and interest is vital. Don't wait until it's too late to consult a tax lawyer.

Tax attorneys know about tax changes, have superior negotiation skills, can impart practical advice, and will keep your confidentiality. They are experts in helping you resolve your tax problems, concentrating on relief and tax problems.

Confidentiality

With the stress of IRS issues, you may find yourself saying things or dreaming of ways out of your circumstance that can get you into even more trouble. You have to make decisions about what deductions to claim or what information to report on your tax return. Unlike some tax professionals, tax attorneys keep your conversations confidential. You will be able to ask your tax lawyer whatever questions you wish and brainstorm scenarios without worrying that your words will be shared with others. It is imperative to note that tax lawyers won't advise you to act illegally, though they also will not tell on you if you're acting suspicious.

Practical Advice

In order to offer you advice regarding deductions and claims, tax lawyers have to get to know you. With their counsel and expertise, you won't be breaking the law. They can guide you through audit preparation, Collection Appeals, Offer in Compromise, and more IRS actions. They'll be able to figure out if bankruptcy is a solution. You'll have peace of mind believing that your IRS problems are moving towards a resolution.

Vital Negotiation Skills

A tax lawyer can contribute the needed negotiating skills to navigate through the complex IRS appeals processes and guidelines. With the numerous closed doors and inevitable red tape, negotiating with the IRS can be a hard job. The IRS system is familiar to most tax attorneys. They'll help you deal with the many facets of the IRS.

Knowledge of the Current Tax Updates

Tax lawyers can advise you on trust funds and stock portfolios appropriately and are updated on the nearly annual changes in U.S. tax laws so there won't be any surprises.

Tax Attorney Selection

A tax attorney must be picked carefully. You should find one who's dealt with the IRS before, especially if you have IRS issues that you want resolved right away. Ask your friends and/or your personal lawyer for referrals. Ask for references and check them. The tax lawyer must be affiliated with your state's bar association and the American Bar Association. Also know the tax attorney's rates and terms for payment.

Indeed, a reliable tax attorney is a good investment.

Should You Go For an OIC?

An OIC (Offer in Compromise) is a solution you may think about in handling your IRS problems.

Pros

• If you have tax debt, an OIC allows you to make a deal with the IRS to settle what you can afford and the balance is forgiven. You'll have no more tax debt to pay and you can start over.
  
• Salaries and assets can't be seized during review, considerably reducing your stress level.
  
• The IRS should release tax liens within 30 days when the OIC is accepted and you've paid the balance agreed upon. A Notice of Release of Federal Tax Lien will be filed on public record. This should improve your credit rating.
  

Cons

• For 5 years, you should comply with the provisions of the IRS Code if the IRS accepts your offer.
  
• When you file an OIC, the statute of limitations for collecting your taxes (ten years) will be extended for the time the Offer is pending plus sixty days. This extension takes effect even if the OIC is not approved. Just be aware that sometimes it may take the IRS a year to review an OIC. An OIC is accepted, though, if it takes the IRS over two years to review your OIC, under new regulations.
  
• With the acceptance of your OIC, you agree to not contest in court or appeal the amount of your tax debt.
  
• Tax refunds you may be expecting the calendar year the IRS accepts the OIC, including interest for the period will be forfeited.
  
• Disclosure of your full financial history is required, which may cause more audits if the IRS finds that you were hiding something.
  
• By defaulting on your OIC, your back taxes plus interest and penalties will be reinstated in full, not including the payments you have made.