People who hire accountants for personal or business reasons usually do it for the same reasons: accounting and the myriad tax laws are not their bailiwick. Even if clients are interested in managing their finances on their own, chances are there simply is not time to learn everything a professional knows. Hiring an accountant is often a safer and simpler means to make sure Uncle Sam gets what’s coming to him, without the burden of costly mistakes and direct dealings with the IRS.
However, from time to time private citizens will find themselves in the unenviable position of dealing directly with the IRS. Whether it is a situation requiring collections, or simply a misunderstanding, for those of us not accustomed to communicating directly with an IRS agent, this can be intimidating and confusing.
When a taxpayer is dealing directly with the IRS, the taxpayer is usually at a disadvantage. An IRS agent knows what to look for, while the taxpayer may not. Similar to representation in a court of law, it is important to have representation from a professional who understands the IRS’s motivation and has experience in how to handle the situation. Unfortunately, if a taxpayer goes it alone without the proper preparation or understanding, it can be easy to get overwhelmed and end up with a settlement that is cumbersome. Additionally, this process could require filing a variety of different papers, which can only add to the confusion. Unfortunately, if paperwork is not filed properly, it can result in having a settlement proposal rejected or missing out on the opportunity to save thousands of dollars.
You, as a taxpayer, likely do not know all the formulas and rules that are applicable to your situation. IRS agents will, but may only reveal the portion they want you to know, not the portion that would be helpful to you. Of course, who could blame them? After all, the agents’ job is to collect money from the taxpayer.
When an individual has proper representation, either by a CPA or a tax attorney, the playing field is more level. The chance for the taxpayer to get to the end of the process wondering what happened is less likely. Situations that can require direct IRS communication include cases involving an operating business, aggressive IRS collections action such as a bank or wage levy, or a complicated tax situation that needs extra attention. Other areas in which taxpayers may find themselves in need of representation with the IRS are:
- Liens & seizures
- Payroll tax problems
- Delinquent tax returns
- Offers in compromise
- Installment agreements
- Penalty abatement
- IRS appeals
- IRS collection problems
- IRS audits
When a taxpayer is looking for the proper person to represent him or her with the IRS, it is important to make sure that person has extensive experience. Many programs make promises to represent you for a small fee, but it is also a good idea to interview the person who is going to speak on your behalf. Understand that if the IRS is looking to collect large amounts of money from you, it is a good investment to find a professional representative with the experience to help you, versus the one who is the least expensive.