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Do I Need to Hire a Tax Attorney, CPA, or Enrolled Agent?

Do You Need to Hire a Tax Attorney or Other Tax Professional?

The truth is not every legal matter requires the use of an attorney and likewise nor does all tax matters. Owing less than $10,000 because you claimed 10 dependents on your W-4 or did not make estimated tax payments on your self-employment are two examples. However, in many other situations involving large amounts of tax owed, or non-filed tax returns, you may not wish to chance the perils of going it alone without the advice of an experienced tax professional who can help you out. In fact, while good  professional representation may not be cheap, it can help get you out of a number of sticky situations - such as the abatement of penalties on a large tax bill, arguing for legitimate tax deductions on previous disallowed items, overturning the assessment of the trust fund recovery penalty, or even the settlement of taxes for less than the full amount owed - not to mention the potential alternatives for not using an attorney -- including larger repayment plans, lost deductions, or worse, jail time.

While each person or business' situation is different, there are times when you really should hire a tax professional, whether that be a tax attorney, CPA, or enrolled agent.


Here are the Top 10 Reasons to Hire Representation Before the IRS

1. Tax law is complicated. If you are not a tax professional, you probably have no business acting like one in certain instances. Even experienced lawyers typically do not represent themselves in court. A solid case can quickly unravel without the help of a trained and emotionally detached tax professional. Similarly, failing to hire a tax professional when starting a business, reviewing a contract or embarking on other endeavors with potential legal ramifications can result in otherwise avoidable pitfalls.

2. Not having a tax professional may end up costing you more. What is at stake? A criminal case may determine whether or not you spend time behind bars, while having a civil penalty from being assessed the trust fund recovery penalty could hurt your personal credit.  Also, you can claim professional fees if you are a business, so hiring a tax professional can save you money and a lot of headaches.

3. Tax professionals know how to challenge IRS assessments. You may not even know that the IRS improperly issued a tax levy or wage garnishment against you, or that the denial of an expense contradicts the inclusion of income. And did the Revenue Officer properly follow the collection due process every step of the way, or did he trample on your rights? Your tax professional will find out and make sure they follow the rules.

4. Tax professionals understand how to properly fill out IRS collection statements and handle other IRS procedures such as appeals. If you're not a tax professional, you may struggle with the deadlines and protocol for properly filling out and filing certain IRS documents. One late or incorrect filing could derail your case, delay a given legal procedure or worse - have the case thrown out altogether (resulting in enforced collection actions such as a bank levy).

5. Because you don't know how to deal with a bad Revenue Officer who is not following due process. Tax professionals depend on their knowledge and experience to know when to file an appeal, when to speak with the Revenue Officer's Group Manger, or when to use the Taxpayer Advocate's Office to help win their clients' cases. When things go bad with your Revenue Officers most taxpayers have no idea where to turn.  Your tax professional will.

6. You're not sure what your options are -- or what a 'CAP' is? Doing what the Revenue Officer says is not the only choice, even if there is evidence showing you have the assets to full pay. A tax professional who understands the IRS procedures will be best situated to explain your options and can help you avoid potentially severe penalties even before your case is assigned to a Revenue Officer.

7. Because it is probably better to avoid problems in the first place rather than try to fix them once they arise. You may have heard the saying "an ounce of prevention is worth a pound of cure?" Well, hiring a tax professional in many instances will help you avoid potential legal headaches down the road. Do you understand the fine print of the Partnership Agreement, the Articles of Incorporation or the Articles of Organization you are signing? A tax professional will.

8. A good tax professional can strike up a good settlement offer in compromise or repayment plan, if necessary. An experienced tax professional probably has seen cases similar to yours or at least knows enough to make a calculated guess about how it might be resolved. Sometimes a settlement (offer in compromise) is the best choice, while other times it is clear you don't qualify to see your case through resolution through an installment agreement, or currently not collectible status.

9. The IRS has legal representation. Taxpayers are generally at a disadvantage when squaring off against Revenue Officers or with ACS. As explained above, tax law is complicated, and the IRS will take advantage of this inequity.

10. Tax professionals (not salespeople, so be careful who you are speaking with) often provide a free initial consultation.  Reaching out to a tax professional with a free consultation (either on the phone or through email) will give you an idea of the type of case you have, but it will also help you decide whether you need to hire a tax professional.

Contact me today and I will be happy to help you out.  

-Nick Hartney, Licensed to Represent Taxpayers Before the IRS

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