When it comes to your money, there's only one person with your best interests at heart - and that person is looking back at you in the mirror. Handling your finances and making decisions can give you peace of mind and help you avoid costly mistakes.
There is a lot to be said for the do-it-yourself approach to your money, yet the go-it-alone path has its limitations, especially regarding the IRS and back taxes.
We see clients that have tried to handle their taxes on their own, sometimes raising red flags with the IRS, resulting in audits, or getting hit with a big tax bill they can't pay. They might set up an installment agreement on their own, but often, the DIY approach just makes the penalties and interest keep stacking up, placing you in an endless loop of compounding interest, penalties, and your tax debt growing every month despite making monthly payments. Many of our clients started by trying to do this on their own or with their current tax preparer and didn't get the results they were hoping for.
Dealing with the IRS requires a specialized skill set that most tax preparers and CPAs don't possess. Make sure you have a tax resolution specialist on your side.
So, before you end up in that horror story, here are three times when hiring a tax pro or a tax relief firm like ours is the only way to go.
#1 You Just Received a Major Windfall
Even if you know how to handle your finances, receiving a major windfall can throw your plans into a loop. Whether you are the lucky holder of a winning lottery ticket or the recipient of a significant inheritance, it pays to seek outside advice.
If you choose the DIY approach and make a mistake, you could pay more taxes than you should, but a high tax bill is not the only danger. Handling your windfall the wrong way could throw off your asset allocation, impact financial aid for your college-bound children and create additional problems down the road.
#2 You Have Existing Tax Problems with the IRS
When you have issues with the IRS, you absolutely cannot afford to go it alone. Attempting to resolve tax issues on your own is unwise in the extreme, and a single slipup could leave you on the hook for even more. Ask yourself if you would go before a judge in court without a lawyer representing you. Probably not. It's the same here. Representing yourself before the IRS is generally not a good idea. Don't do it. You most likely will get “creamed”!
If you receive a notice from the IRS, time is of the essence, but you should not let the desire for fast action override the need for professional help and guidance. If you want to resolve your issues fairly without going broke, do yourself a favor and find the right tax resolution firm. Hiring an enrolled agent, CPA, or attorney trained in tax relief is the best way to preserve your rights, and you do not want to go it alone.
#3 When You Have Assets You Need to Protect
When you owe taxes, the IRS only cares about getting paid what they think you owe them.
They'll levy your bank account, emptying everything you have in there. If you run a business, that means you won't be able to pay your employees, pay your office rent or keep your lights on, ultimately putting you out of business.
They'll also garnish your paycheck, leaving you about 10% to 25% of your net pay to live on. Good luck with that.
They can also put a lien on your assets, including real estate, personal property, and financial assets. This puts in jeopardy everything you've worked so hard to attain.
Hiring the proper tax relief professional can help you avoid such extreme measures taken by the IRS. They'll communicate with the IRS on your behalf and can often remove a lien or levy. If you have assets you can't afford to lose, then hiring a tax relief pro is the only way.
The Bottom Line
Even if you are confident in your Do It Yourself (DIY) approach or feel your tax problem isn't so severe, it never hurts to get a second opinion. If you are doing everything right, that tax resolution specialist's advice will give you peace of mind. If there are deficiencies in your actions, the advice you get could stop you from making a devastating and possibly irreversible mistake. You may also find that you can settle your back tax liabilities for less than what you owe. Often, for a fraction of what's owed!
If you run into tax trouble, reach out to our tax resolution firm, and we'll schedule a free, no-obligation confidential consultation to explain your options to resolve your tax problem permanently.