Frequently Asked Questions

Tax relief refers to programs and strategies that reduce, defer, or eliminate a taxpayer's liability to the IRS. This includes installment agreements, Offers in Compromise, penalty abatement, and other IRS resolution programs.

TaxWave typically works with clients who owe $10,000 or more to the IRS or state tax authorities. Below that threshold, the cost of professional representation may not be justified by the potential savings.

Yes. While our primary focus is federal IRS debt, TaxWave also assists clients with state tax debt resolution in many states. Contact us to discuss your specific state situation.

Timeline varies significantly by program. Installment agreements can be set up in days to weeks. Offers in Compromise typically take 6–12 months. Unfiled return compliance cases depend on how many years need to be prepared. We provide realistic timelines during your initial consultation.

The IRS Fresh Start Initiative is a collection of policies that expanded taxpayer access to installment agreements, Offers in Compromise, penalty abatement, and federal tax lien withdrawal. It was introduced in 2011 and expanded through 2012–2014.

Not automatically. Installment agreements require you to pay the full balance over time. Offers in Compromise can significantly reduce what you owe, but not everyone qualifies. CNC status pauses collections but does not eliminate the debt.

There is no single application. Each program (OIC, installment agreement, etc.) has its own forms and eligibility requirements. TaxWave determines which programs you qualify for and handles all applications.

Yes. TaxWave is a licensed tax resolution firm. Our team includes IRS enrolled agents, CPAs, and tax attorneys — all credentialed to represent taxpayers before the IRS and state tax authorities.

Most CPAs and accountants focus on tax preparation — not IRS resolution. TaxWave specializes exclusively in resolving existing tax debt. We know IRS collection procedures, negotiation strategies, and resolution programs in depth that most general practitioners do not.

TaxWave has thousands of verified client reviews, is headquartered at a verifiable business address in Costa Mesa, CA, and employs credentialed professionals you can verify through the IRS Preparer Tax Identification Number (PTIN) registry.

TaxWave charges flat fees based on the complexity of your case — not hourly rates. After your free consultation, we provide a written fee quote before any work begins. There are no surprise charges.

TaxWave offers flexible payment options for our services. We discuss payment terms during the consultation based on your situation.

We are transparent about expected outcomes before you hire us. If we cannot help you, we will tell you that during the free consultation rather than taking your money.

A CP14 notice means the IRS has determined you have an unpaid balance. It is typically the first formal notice in the IRS collection process. You should respond promptly — either by paying the balance or contacting TaxWave to explore resolution options.

Yes. Letter 1058 is the IRS's Final Notice of Intent to Levy. It means the IRS intends to seize your assets within 30 days unless you take action. Contact TaxWave immediately if you receive this letter.

Do not ignore IRS notices. Ignoring them accelerates the collection timeline. Contact TaxWave and we will review the notice, explain what it means, and advise on the best course of action — at no charge for the initial review.

Ignoring IRS debt leads to escalating consequences: penalties and interest compound, the IRS files a federal tax lien, then a levy on your wages or bank accounts. The longer you wait, the fewer options you have.

No, it is not too late. The IRS almost always wants you to file, and filing — even late — starts the clock on statutes of limitations that actually protect you over time. TaxWave prepares delinquent returns and negotiates any resulting balance simultaneously.

Yes. The IRS can levy Social Security retirement and disability benefits under the Federal Payment Levy Program (FPLP), taking up to 15% of each payment. TaxWave can pursue levy release through an approved resolution arrangement.

Not paying taxes is a civil debt — not a criminal offense. The IRS cannot imprison you for being unable to pay. Criminal prosecution is reserved for tax fraud: willfully falsifying returns, hiding income, or deliberately not filing. Fewer than 2,000 criminal tax cases are prosecuted per year nationally, almost all involving deliberate fraud.

The IRS generally has 10 years from the date of assessment to collect — this deadline is called the Collection Statute Expiration Date (CSED). After that date, the debt is permanently removed from your account. However, the CSED clock can be paused by events like submitting an Offer in Compromise, bankruptcy, or signing a waiver.

Yes, after the 10-year Collection Statute Expiration Date (CSED), the IRS loses its legal right to collect and the balance is permanently erased. In practice, the IRS escalates enforcement well before the statute expires — which is why ignoring the problem rarely leads to expiration.

IRS interest is the federal short-term rate plus 3%, compounded daily — currently around 7–8% annually. Interest accrues on both the unpaid tax and on any penalties charged. On a $50,000 balance, you're adding roughly $3,500–4,000 per year in interest alone.

To qualify, you must: (1) be current on all required tax filings, (2) be current on estimated tax payments if applicable, (3) not be in an open bankruptcy, and (4) have a Reasonable Collection Potential (RCP) that is less than your total balance owed. The RCP is calculated using your income, allowable living expenses, and net asset values.

No — the IRS does not report to credit bureaus. An accepted OIC has no direct impact on your Equifax, Experian, or TransUnion credit scores. However, if a Notice of Federal Tax Lien was previously filed, that lien is a public record. Once your OIC is accepted and paid, you can request lien withdrawal to remove it.

Typically 12–24 months from submission to decision. During that time, collection activity is suspended and the 10-year collection statute is paused. If the IRS does not make a decision within 24 months of submission, the offer is automatically accepted.

The IRS charges a $205 nonrefundable application fee. Low-income taxpayers (income at or below 250% of the federal poverty level) can apply for a full fee waiver using Form 656-A. You must also include an initial payment: 20% of the offer if paying as a lump sum, or the first monthly installment if paying over time.

Common audit triggers include: unusually large deductions relative to your income, unreported income shown on W-2s or 1099s, home office deductions, large charitable contributions without documentation, rental losses exceeding passive activity limits, repeated business losses (hobby loss rules), cash-intensive businesses, and unreported cryptocurrency transactions. The IRS uses a statistical scoring system (DIF) to flag returns that deviate from norms.

Not responding allows the IRS to accept its own proposed adjustments — disallowing deductions, adding income, and assessing additional tax, penalties, and interest. The IRS then issues a statutory notice of deficiency. If you miss that deadline too, the tax is assessed and collection begins. Missing audit deadlines can permanently eliminate your right to contest the outcome.

The standard audit statute is 3 years from when the return was due or filed. But if you omitted more than 25% of gross income, the statute extends to 6 years. If you filed fraudulently or never filed at all, there is no statute of limitations — the IRS can audit any year indefinitely.