Benefits of Hiring a Certified Tax Resolution Specialist
Tax problems can plague anyone, whether the taxes are owed or not. Federal and state tax liens can create credit problems, and levies can contribute to economic hardship.
And dealing with the IRS can be a burden in itself. That’s why people with tax problems need a Certified Tax Resolution Specialist. A tax specialist has unique insight into IRS regulations and solutions so that they can craft dedicated strategies for any tax situation.
Before tackling a tax issue, review this guide to Certified Tax Resolution Specialists and when it’s imperative to hire one.
What is a Certified Tax Resolution Specialist?
A tax resolution specialist is a finance or law professional that helps individuals and businesses manage their tax problems. These tax experts have extensive experience with IRS tools like offers in compromise, installment agreements, and penalty abatement.
The Certified Tax Resolution Specialist (CTRS) designation is offered by the American Society of Tax Problem Solvers (ASTPS.) It has rigorous education and experience qualifications, and candidates must pass a comprehensive two-part exam.
There are three types of professionals eligible to submit an Application for Examination:
The ASTPS also requires that candidates exhibit credibility and truthfulness while adhering to ethical standards as part of its character stipulations.
What Experience is Required for Tax Experts?
In addition to the professional requirements, Certified Tax Resolution Specialists must meet these basic qualifications:
- IRS Representation CE: Candidates must have completed at least 16 hours of IRS Representation continuing education courses within the last two years.
- Tax resolution cases: The ASTPS requires that candidates have a minimum of one combined year of full-time equivalent experience with tax resolution cases. They can work in the tax resolution industry or may qualify based on being a former IRS employee.
- Two-part exam: The CTRS exam includes 150 questions plus an extensive case problem that must be resolved during the 30-day exam period.
- College experience: It’s a common misconception that the CTRS designation requires a college degree. However, a degree is not necessary to become an enrolled agent OR receive certification. Why? Because an Enrolled Agent can obtain the certification and this license does not require a degree.
The ASTPS curated a comprehensive study course, the two-day IRS Tax Problem Resolution Boot Camp, for anyone that wants to take the exam. This course also counts toward the IRS Representation continuing education requirements.
What is a Tax Resolution Firm?
A tax resolution firm is an agency that offers a variety of services that help people resolve their tax problems. Reputable tax resolution firms have Certified Tax Resolution Specialists – attorneys, CPAs, and EAs – that review each case and create a dedicated strategy for resolving issues like federal and state tax liens, penalties, and unpaid tax bills. These firms do charge a fee, but they generally offer a comprehensive set of services so they can solve all of their clients’ tax problems.
What Types of Solutions Do Certified Tax Resolution Specialists Provide?
The essential function of tax problem solvers is to resolve multiple common IRS woes. They do not handle tax preparation services in their role as Certified Tax Resolution Specialists, though some professionals may offer those separately.
The most common tax solutions for a CTRS to provide:
- Installment agreements: The IRS offers payment plans and installment agreements for individuals and businesses that have taxes owed. A CTRS can help navigate the qualifications and requirements for using these services.
- Levy release: One way the IRS collects unpaid taxes is to levy property. Anyone with economic hardship can get a levy released by filing an appeal. However, the IRS does not generally release individuals from their obligations.
- Lien Relief: The IRS generally doesn’t release a federal tax lien until the tax is paid. In certain cases, A CTRS can work with them to have a lien withdrawn, subordinated, or discharged from specific property that could put the taxpayer at risk.
- Offer in Compromise: Tax forgiveness isn’t an explicit option with the IRS, but they do allow people with taxes owed to make an offer in compromise. This offer is a partial amount someone can pay to settle their taxes owed.
Other Solutions They May Provide
- Penalty abatement: Certain IRS penalties are eligible for waivers. There is a first-time penalty abatement for anyone who fails to file, pay or deposit (businesses) taxes on time, and the IRS offers additional waiver options for anyone who has reasonable cause.
- Wage garnishment Relief: If the IRS files a levy and wages are garnished, a CTRS can help negotiate the amount that is to be garnished down based on extenuating economic factors. The CTRS can also negotiate with the IRS to set up an agreement that lifts the tax levy.
- Innocent spouse relief: Anyone who is penalized for omissions or improper reporting committed by their spouse or former spouse can benefit from innocent spouse relief. However, the taxpayer requesting innocent spouse generally needs to prove they did not benefit or know about the improper tax reporting.
In addition to the marked tax services, the ASTPS requires candidates to have experience with non-filer issues.
4 Essential Reasons to Choose a Certified Tax Resolution Specialist
Though some people might be tempted to approach the IRS directly. Certified Tax Resolution Specialists have experience working with a variety of cases with different resolutions. There are critical situations that require professional help for the best outcome.
1. Routine Failure to File Taxes
The IRS generally forgives people who fail to file their taxes the first time. They even offer a first-time penalty abatement that covers failure to file or making a late payment. Unfortunately, the IRS does not offer routine non-filers the same forgiveness and will have to pay interest and penalties.
A reputable CTRS has worked with non-filers in the past and has experience resolving tax problems and back taxes. Common resolutions might include an offer in compromise, or a payment plan coupled with a penalty abatement, which can be difficult to negotiate without a professional.
2. Significant Taxes Owed
Most individual and small business owners are eligible for installment agreements, payment plans, or an offer in compromise. People with significant taxes owed will feel the weight of interest more than those with lower balances, but a professional knows the tricks to negotiate with the IRS.
While the IRS does not offer interest forgiveness, it does allow individuals and businesses to make a reasonable offer to pay off their taxes. That’s where a Certified Tax Resolution Specialist comes in. They work to get the lowest tax settlement for their clients.
3. Combined Business and Personal Finances
It’s common for self-employed individuals and small business owners to mingle their business and personal finances, especially early in the development of their company. This can lead to inaccurate federal and state tax filings. It can also significantly impact how much someone owes in taxes.
A CPA might still be necessary to separate business endeavors from personal finances once tax returns have already been filed. A CPA with the Certified Tax Resolution Specialist designation, though, can manage tax preparation in addition to tax problems.
4. Questionable Levies or Liens
Sometimes the IRS makes mistakes, or they gather inaccurate information. It is possible to appeal or dispute tax liens and levies, but it takes an enormous amount of time and an extensive commitment to recordkeeping.
Professional help is often necessary for lien removal or levy release. A CTRS can also help with innocent spouse relief for individuals who have tax problems because their spouse misrepresented information on tax returns.
Certified Tax Resolution Specialist Vs. Certified Tax Representation Consultant
When you're looking for tax pros, you will likely see both the CTRS and the CTRC designations. Both certifications indicate that a tax pro has received additional training focused on tax resolution topics such as audits, collection processes, and relief options. So, what's the difference? A CTRC receives certification from the Tax Rep Network, while a CTRS gets certified through the Society of Tax Problem Solvers. Both focus on helping clients with tax problems, and they both must pass relatively similar tests to get their certifications. One major difference is that CTRCs must recertify by taking classes or attending seminars every three years, but CTRSs only need to recertify every five years. By extension, a CTRC may have more up-to-date knowledge.
Choosing a Tax Resolution Expert
It can be challenging to find and choose tax problem solvers. There are hundreds of organizations to research, and they don’t all have their client’s best interests in mind. A reputable tax resolution expert will have a history of repeatable cases, multiple client reviews, and an extensive catalog of tax services.
The right Certified Tax Resolution Specialist will have specific experience and cases with similar characteristics. They’ll be able to offer measurable proof of their expertise.
If you need help finding a tax resolution professional, TaxCure has made it easier than ever to search and filter tax professionals based on what is important most to taxpayers. There are many different types of tax problems and solutions for many different tax agencies. Start your search below by selecting the agency or agencies you have a problem with. You can then select problems associated with that agency and find the top-rated pros for helping with those types of problems.