Tax Resolution vs. Tax Preparation

Tax preparation and tax resolution are two terms that often get used interchangeably, but they are actually two different things. Tax preparation is the process of preparing and filing tax returns, while tax resolution is the process of resolving tax problems with the IRS.

TheIn this article, we will discuss the differences between tax preparation and tax resolution so that you can better understand the two terms and how they relate to your tax situation.

Tax Preparation

Tax preparation is the process of preparing and filing tax returns. This includes gathering all the necessary documents and information needed to complete a tax return accurately. Tax preparation services can be provided by a tax professional or done by an individual using tax preparation software.

Tax preparation involves calculating your income, deductions, and credits to determine your tax liability or refund. It is essential to ensure that your tax return is accurate and complete to avoid any penalties or audits by the IRS.

Tax Resolution

Tax resolution is the process of resolving tax problems with the IRS. This includes negotiating a payment plan, reducing penalties and interest, and resolving any outstanding tax debt. Tax resolution services are typically provided by tax professionals with expertise in dealing with the IRS.

Tax resolution is necessary when you owe back taxes or have unfiled tax returns. The IRS has the power to garnish wages, levy bank accounts, and seize assets to collect unpaid taxes. A tax professional can help you negotiate with the IRS to resolve your tax problems and avoid these consequences.

Key Differences

The key differences between tax preparation and tax resolution are:

Purpose: Tax preparation is done to prepare and file tax returns, while tax resolution is done to resolve tax problems with the IRS.

Focus: Tax preparation focuses on ensuring that your tax return is accurate and complete, while tax resolution focuses on negotiating with the IRS to resolve tax problems.

Professional Involvement: Tax preparation can be done by an individual using tax preparation software or a tax professional. Tax resolution typically requires the services of a tax professional with expertise in dealing with the IRS.

Timeframe: Tax preparation is typically done once a year before the tax deadline, while tax resolution can take longer and may require ongoing negotiations with the IRS.

Conclusion

In conclusion, tax preparation and tax resolution are two different things that serve different purposes. Tax preparation is the process of preparing and filing tax returns, while tax resolution is the process of resolving tax problems with the IRS. If you have tax problems, it is essential to seek the services of a tax professional with expertise in tax resolution to help you navigate the process and avoid any negative consequences.