For many, dealing with the IRS can invoke significant stress, especially when one has received a notice of an impending audit. Should I lawyer up? This may be the first reaction; however, in many instances, this is not necessary.
When you get an IRS notification, you should first take a deep breath and relax so that you can constructively interpret what the IRS notification pertains to, along with its gravity. For example, you may receive an audit notification due to a random selection technique and not based on anything you did or reported. Or maybe the audit was triggered due to a simple omission or miscalculation of reported tax return items. Once you or your accountant have reviewed it, you can remedy and explain as needed. As a tax lawyer, I receive calls requesting legal services, which are not required. I inform the caller accordingly. However, as a licensed CPA, I also give accounting advice as needed.
As far as IRS representation goes, one can be represented by an attorney, a CPA, or an IRS EA. There is some overlap towards what any of these professional types can do. All can negotiate and structure IRS deals on your behalf, hopefully getting you a better outcome and reducing your tax debt.
In this blog, I will discuss the circumstances where you probably don’t need legal representation and the situations where having a tax attorney to address your issue is the wisest choice.
Situations Where You Don’t Need a Tax Attorney
In case of an audit, your records are well maintained, and you have followed the tax code correctly; you should be able to get through the process without much trepidation. At most, having a tax CPA who can help prepare the information audit will be all that is needed.
In cases where you are being audited because of a questionable item, a range that falls outside the norm for that industry, a charitable deduction amount, and certain questionable expenses, you may only need to provide verification and plausibility. Getting your records in order and providing scheduled schedules align with what a CPA or an EA would specialize in.
Suppose you have a tax assessment that has an amount beyond your ability to pay at once. In that case, other options may be available to settle the debt, including installment plans, tax reduction negotiations, and other options. This area is where a tax attorney, a CPA, or IRS EA could investigate all available options, arrange ideal payment terms, or incorporate possible debt reduction strategies. Some of these options could include the following:
- Penalty Abatements – specific penalties and associated interest removed or reduced.
- Currently Not Collectible status – having collections stalled.
- Offer In Compromise – settling the tax bill for a lower amount.
- Installment Plans – pay tax debt over time.
- Innocent Spouse Relief – typically, for joint filers, both are joint and severally liable for the entire tax bill; however, there are circumstances where one spouse can be relieved of tax liability attributable to the other spouse.
When Tax Lawyers are Required
The main reason to hire a tax lawyer is when there are potential tax fraud and/or tax evasion charges. A lawyer can provide the necessary expertise and legal counsel, which one would most likely not receive from a non-lawyer tax practitioner. Most tax audits do not require this representation level, but knowing your options is beneficial if the potential for criminal charges exists.
If you need tax audit defense, having a tax lawyer would be advantageous for the following:
- Negotiating - lawyers are trained to look at both sides of a position which is ideal when needing to leverage all elements of the situation to obtain optimal results.
- Testifying Exemption - lawyers offer privileged communications, whereas other tax professionals may be compelled to testify against you in a legal proceeding.
- Criminal Charges Looming – If your tax situation has regressed to where IRS is threatening you with criminal prosecution, you will want an aggressive tax attorney on your side to fight for your rights.
- Portray Greatest Defensive Capability – having a lawyer for day one signals that you plan to avoid criminal charges and have adequate legal counsel in your corner.
Harmon Tax Resolution, LLC has you covered in either realm.
Since Will Harmon is a tax attorney, CPA, and IRS EA, he can provide complete representation across the spectrum. Whether you’re undergoing an audit due to a minor clerical error or facing criminal charges for tax evasion or tax fraud, Will can help.
No matter what level of representation is needed, it is paramount to respond quickly and without delay. The situation only worsens the longer you wait to respond to the IRS. Sometimes, you lose certain appeal rights if you wait too long. For a free consultation with a Port Saint Luce, Fort Pierce & Stuart Tax Attorney, contact Will Harmon today.