We try to answer many of the most common questions. If we have missed yours, please send us your question.
What is a federally recognized taxpayer representative? By law there are only four categories of individuals who can represent taxpayers before all administrative levels of the IRS. Enrolled agents, Certified Public Accountants, Attorneys, and in a limited role Enrolled Actuaries.
What is an administrative level of the IRS? Administrative level is the main body of the IRS. It represents the audit, collection, and appeals functions of the IRS. The other level is the judicial level which represents the Criminal Investigation Division (CID). If CID becomes involved in your case, you will need an attorney, the best one you can find.
Can my tax preparer represent me? If your tax preparer is not federally recognized, he/she can represent you if the return he/she prepared for you is audited. In all other matters, your preparer has no standing with the IRS and will not be recognized.
Can I refuse to talk with the IRS? Unless served with an administrative subpoena, you are not required to deal directly with the IRS. This does not mean you can ignore them. It only means that you can retain the services of a federally recognized taxpayer representative. Someone must talk with them because left to their own devices they can get up to a lot of mischief.
Can I handle my own case if I have a problem with the IRS? Yes, but the better question, is do you want to? You could jump off a tall building but it would not be your best choice. There are some items where you are the best person to answer the IRS. If they can not read a social security number or it does not match your dependent, you can easily answer this. But our recommendation is to talk with one of the tax professional listed here in your area to determine what risks there are for you.
I see all these ads telling me the IRS will settle for pennies on the dollar. Can I do that too? You can certainly ask the IRS to settle for less than you owe. It is called an Offer in Compromise. A better question, is whether they will accept your offer, and that is an unknown without doing some very detailed work. While an OIC stops the IRS from trying to collect from you it also keeps the period they can collect open longer. And the IRS uses a very rigid guideline on what they will accept to settle the debt. There is no set percentage number the IRS uses to settle debts. Instead, it is the amount of money they think they can get from liquidating all your assets and continuing to collect from you over the next five years. And the numbers they use for your living expenses are obscenely low. One of the taxpayer representatives listed here can help you determine whether an OIC is a good option for you or not.
Is it expensive to hire a taxpayer representative? No. While there is an upfront cost, the savings using our knowledge to work with the IRS will generally more than offset the fee. Plus you have the right to ask your representative what you can do to save on professional fees. We will gladly send you a list of things you can do to save professional fees (Representation Costs). The bottom line is that you can always do things for yourself, you can defend yourself in court, fix your own transmission, pull your own teeth. But would you be better off if you did? Most of us would not.
The IRS said they would file a lien. Does that mean they can take my property? Not on the basis of a lien. A lien gives the government a right in your property. That right is to be paid the amount owed. It just secures their interest the same way mortgage does on your home or the lien filed when you take out a loan for a car. A levy is the action of taking your property. They must give you advance notice of their intent to levy. If you do not properly respond to the levy action, they can begin taking your property. This is a drastic step. We see it most often when they levy a bank account or garnish wages. You do not get to this step immediately