When taxpayers initially arrive in our office for assistance with resolving their IRS tax issue, the first item on the agenda is their current tax compliance. The IRS Collection Division are sticklers for one very significant rule: there is no deal without tax compliance.
So what is “compliance” for tax purposes?
When we discuss tax compliance what we mean is that the client has filed all outstanding tax returns and is making required tax payments, including:
- For employees this means that the proper amount of withholding for federal income taxes are being withheld each pay period;
- For self-employed individuals they are making their quarterly estimated tax payments on schedule; and
- For employers they are depositing and filing their quarterly payroll taxes and tax returns on time.
Without current compliance, the IRS will refuse to enter into any agreement to resolve back taxes because there is no point to working on the old tax debt while the taxpayer continues to compile new tax debt.
So start 2011 on the right foot by getting into compliance!