Should You Hire a Tax Professional When Facing the IRS ?
You can successfully take on the IRS alone most of the time. But if you feel over your head or want professional reassurance, consider consulting or hiring a tax professional. Under the Taxpayer Bill of Rights (read at irs.gov), you may have a representative handle any IRS matter for you. You never have to face the IRS if you hire a tax professional. You also have the right to call "time out" to consult a tax professional during the process whenever you are taking on the IRS by yourself. But you don't have the right to free help. You'll have to pay whomever you hire.
You can safely go it alone in the two most common, but serious, IRS situations: • you are being audited and your records are in order, you can substantiate almost everything on your return, and you have nothing to hide, or • the IRS is seeking to collect an overdue tax bill of $10,000 or less and you can pay it off over time.
But before making any decision on proceeding alone or working with a tax professional, weigh the pros and cons of each.
Going it alone Pro: You save professional fees. Con: It takes a lot of time.
You may find it very stressful.
You may say or do the wrong thing.
Consulting a tax professional before facing the IRS on your /own
Pro: You gain knowledge, strategy, advice, and confidence. Con: Most tax professionals charge for a consultation, but it will be less than if you hire the tax professional to represent you.
Hiring a tax professional to represent you before /the /IRS
Pro: The IRS respects knowledgeable tax professionals. You don't have to face the IRS in most cases. Tax professionals know tax issues. Con: Tax professionals are expensive if they are good. You understand your tax records best. You risk hiring someone who is inexperienced or incompetent.
How Tax Professionals Can Help
Myth: The IRS will think I am guilty of something if I hire a tax professional or will get mad at me for not facing them myself. Fact: IRS auditors and collectors prefer dealing with experienced tax professionals. It makes their job easier. Good tax professionals know what the IRS wants and don't get overly emotional.
If you face an audit, collection of a tax bill, or a tax court hearing-and you've decided to find a tax professional-here is what you should get:
*Consultation and advice. A tax professional can analyze your situation and suggest a strategy. Rarely is there only one way to handle an IRS matter. Once you know the alternatives, you can make an informed choice. Of course, a tax professional might pitch her services. Weigh the professional's advice against what you have learned by reading this book and your own judgment. If the tax professional suggests a course of action you believe is excessively expensive, is dishonest, or doesn't make sense, find someone else. There are good ones and bad ones, as in any profession.
*Negotiation. An experienced tax professional should know what kinds of deals can and can't be made with the IRS.
*Representation. Tax professionals know IRS procedures and how to maneuver around the IRS bureaucracy. They can neutralize the intimidation factor the IRS knows it holds over you. And, if you have something to hide, a tax professional usually can keep the lid on it better than you can.
Frederick W Daily is a tax attorney, author and former tax law professor. He has over 35 years experience in helping folks and businesses deal with the IRS disputes. He has appeared on hundreds of radio and TV programs including Good Morning America. He is regularly quoted as a tax expert in the publications such as New York Times, Wall Street Journal and Money magazine. He is the author of best selling books such as "Tax Savvy for Small Business" and "Stand Up to the IRS." For more information see http://www.taxattorneydaily.com
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