If you are in over your head with a tax problem, do yourself a favor and call in a tax pro. Tax professionals such as CPA’s, tax attorneys, and Enrolled Agents work with the IRS on a daily basis and know the ins and outs. They have the tools needed, and often have more credibility with the IRS than you do. So, don’t be afraid to utilize their expertise and resources when you get in over your head.
There are only three professionals that are licensed to practice before the IRS; Certified Public Accountants, Enrolled Agents, and Attorneys.
Certified Public Accountants (CPAs) are experts in accounting. They can be called upon to help you reconstruct missing business records. Some, but not all, CPAs are experts in IRS negotiation. Make sure you find one who has experience settling claims with the IRS.
Attorneys are your choice if you are considering bankruptcy, are taking the IRS to court, or are facing criminal charges from the IRS. Attorneys are the most expensive tax professionals, but they have the ability to take your case before a judge.
Enrolled Agents (EAs) are tax professionals that are licensed by the IRS to represent you before the IRS. They are typically less expensive than attorneys, but they can organize your tax records, file back tax forms, and conduct your IRS negotiations.
Tax professionals will keep you from making the big mistakes and can sometimes go back and fix mistakes you’ve already made.
Tax professionals know the tricks of the trade, have the tools needed, and often have more credibility with the IRS than you. So, don’t be afraid to utilize their expertise and resources. They are familiar with the structure of the IRS and the rules the IRS follows. Often, they know more about the IRS rules than the IRS agent working your case.
Your tax pro can get your transcripts electronically; he can calculate your Reasonable Collection Potential; he can stop your wages from being garnished; he may even be able to get you back the money that was seized from your bank account.
How do you know when to call a tax professional? Here is a checklist:
- You lack the confidence to deal with the IRS on your own or you just don’t want to
- You feel that you may have something to hide from the IRS
- You know you must file back tax returns, but you don’t have any records
- An IRS Special Agent has contacted you
- The IRS has seized your bank accounts, garnished your wages, or filed a Federal Tax Lien
- You have assets to protect from the IRS
- You feel that you will not be able to pay off the IRS in full
- You have other non-IRS debts as well as IRS debts and want to consider bankruptcy as an option
- You fear that IRS collection activity will hurt your business
- You owe past due payroll taxes
Jay Mangrum is a Sr. Tax Advisor withHoustonbased Assurance Tax Advisors, a national tax resolution firm specializing in IRS audit representation and tax consulting. For more information on this and other tax topics, visit their website at http://www.assurancetaxadvisors.com.