For those whose situations are a bit more complicated, it is probably best to hire a professional — an Attorney, Enrolled Agent or Certified Public Accountant who specializes in tax representation. The fee you pay will more than cover the satisfaction you will derive from having your tax matter settled by a competent professional.
Here are four reasons to hire an Attorney, Enrolled Agent or CPA to represent you when you owe money to the government:
1) Contrary to popular belief, as a taxpayer you do have rights. One of those rights is to have proper representation. If a revenue agent or officer either calls or visits you, you are under no obligation to answer any of their questions. Often times these questions can be intrusive and condescending. The government is in business to collect whatever is owed them, and very often, use just about any means they can to put their hands in your pocket. You politely request for their contact information and tell them you are in the process of hiring a professional to represent you and that this person will contact them directly. A CPA, Attorney and/or Enrolled Agent that deals with the IRS knows the “ins” and “outs” of how to deal with the IRS so that your rights are protected. A tax resolution specialist also knows how to properly structure a payment plan that fits your circumstances. Generally speaking, if you hire representation in a tax matter, you need not have to interact with the IRS whatsoever.
2) If you owe between $10,000 and $200,000, the IRS has many new flexible programs available to taxpayers such as Offers in Compromise, Partial Pay Installments, Payment Plans, Penalty Reductions, and Currently Not Collectible Status, to name a few. Each carries with it its each unique process, procedures and qualifications. Having an experienced tax professional in your corner ensures you are taking advantage of the best options available to you.
3) Having unfiled returns qualifies for getting professional assistance. Not filing legally required tax returns when due is considered a federal misdemeanor which carries with it a $10,000 fine and potential jail time. Generally the IRS won’t put you in jail unless the taxpayer is deemed to owe a substantial amount of money and is uncooperative about submitting the returns.
4) If you are being audited or about to be audited, the IRS is allowed to ask you about 50 very intrusive questions in the initial interview with them. How you answer these questions will dictate the fate of your case. Having proper representation by a qualified professional, who can conduct these meetings without you, is the best course of action I can recommend. Half of the IRS’s Criminal Investigation Division (CID) comes from that “nice guy” or “nice gal” interviewing you during an audit.
If you needed to go to civil or even criminal court, and choose to do so without a lawyer, you had better know the laws pertaining to your case inside and out. However, if representing yourself doesn’t sound like a good idea, it’s best to hire someone who is well-versed in the subject matter. The same applies to tax representation matters. Having someone who knows how to negotiate and deal with the IRS may be the best money you ever spent.
Ron Friedman is a CPA who practices in Tarrytown, NY.