Federal Tax Matters

IRS Compliance Check

IRS compliance (or noncompliance) is determined by evaluating a taxpayer’s filing history, outstanding liabilities, and timeliness of payments. To be fully compliant with federal tax filing and payment obligations, a taxpayer must accurately and timely file returns, pay taxes on time, and have no outstanding tax liabilities.

A tax attorney reviewing figures with a client as they sign a document

Why it matters

Why is compliance important?

Compliance is crucial not only to avoid accruing penalties and interest from late tax payments, but also because the IRS requires taxpayers to be in compliance before taking specific actions on their accounts. This becomes especially important when facing serious collection actions such as passport suspensions or revocations, Federal Tax Liens, or levies.

Furthermore, evaluating a taxpayer’s compliance history is essential in creating a comprehensive plan to address tax issues. Tax representatives must understand what led to the liability and collaborate with the taxpayer to develop a strategy for addressing current liabilities and a long-term plan for maintaining future compliance.

Taxpayers may not enter into an Installment Agreement, nor may they have an Offer in Compromise (OIC) considered, unless they are in compliance with their tax filings. The OIC program also requires taxpayers to be current with their estimated tax payments and, where applicable, their federal tax deposits. Falling out of compliance by missing future tax payments or filing deadlines can result in a default of the installment agreement or an Offer in Compromise.

What we do

Conducting a compliance check

Our compliance check process involves:

Obtaining a comprehensive 10-year tax history summary
Identifying missing tax returns
Evaluating outstanding tax liabilities
Calculating interest and penalties
Determining Collection Statute Expiration Dates (CSED)
Identifying the stage of each tax year in the controversy process and associated taxpayer rights
Determining the cause of noncompliance issues, such as failure to make estimated tax payments
Obtaining copies of a taxpayer’s Account Transcripts for any year in which there is a liability or missing return
Providing a comprehensive worksheet summarizing the information above
Requesting a collection hold in the case of imminent enforcement action (usually 10–30 days)

Flat fee $1,500 per entity or individual

Our compliance checks are offered at a fixed fee of $1,500 per entity or individual, providing peace of mind and making expert tax attorney assistance accessible to the average taxpayer. This transparent pricing allows you to address your tax concerns without the worry of escalating legal costs. By working with us, you can confidently navigate complex tax regulations, minimize penalties, and establish a solid foundation for your financial future — all while knowing exactly what our compliance check services will cost upfront.

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Watch out for

Common compliance issues

Failure to make estimated tax payments

One of the most frequent compliance pitfalls for individuals is the failure to make estimated tax payments. This issue often affects self-employed individuals, independent contractors, and those with significant income from sources not subject to withholding. The U.S. tax system operates on a “pay-as-you-go” basis, requiring taxpayers to pay taxes throughout the year rather than solely at filing time. Many individuals mistakenly believe they can settle their entire tax bill when filing their annual return, leading to penalties and interest.

The snowball effect of penalties and interest

Another significant compliance challenge is the snowball effect of penalties and interest on unpaid taxes. The IRS imposes various penalties — such as the failure-to-pay penalty, failure-to-file penalty, and the underpayment of estimated tax penalty — which can quickly accumulate. Moreover, interest compounds daily on both the unpaid tax and the accrued penalties, causing the total debt to grow exponentially over time.

A $10,000 liability $20,000+ in just a few years due to penalties and interest

This snowball effect can turn a manageable tax bill into a daunting financial burden. Many taxpayers, overwhelmed by this rapidly growing debt, may fall into a cycle of non-compliance by avoiding future filings or payments — further exacerbating their tax problems and potentially leading to more severe consequences, including liens, levies, or passport revocation.

Navigating IRS compliance

Azarvand Tax Law guides you through the compliance process, ensuring proper preparation and submission of all necessary forms and documents. We collaborate with you to create a tailored long-term plan for maintaining compliance.

Contact us at [email protected] to schedule a free 30-minute consultation and take the first step toward resolving your tax debt.

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