IRS notices in the mail can cause fear. We help you navigate the complexities of examinations and collections to resolve your tax matter.
“The income tax has made liars out of more Americans than golf.”
Our role in assisting clients is to provide representation before the IRS. Much like an attorney represents clients in court, our office is licensed and equipped to represent taxpayers before the IRS. Taxpayers have the right to representation by a qualified professional, such as a CPA, Enrolled Agent, or attorney.
A key benefit to representation is that you gain the skill, experience, and knowledge of a tax professional. The IRS may provide a tax professional courtesies not available to individual taxpayers. The IRS also knows that individual taxpayers are unfamiliar with the nuances of tax law.
As an Enrolled Agent, our office can represent clients in all 50 states and provide representation before state and local taxing authorities in addition to the IRS.
It is vital to respond as soon as possible to examination and collections notices. Missed deadlines generally result in lost opportunities, forfeited appeal rights, and in some cases, final tax assessments which can be more difficult or costly to overturn.
If you require assistance with examination of a tax return or collections of taxes, please contact us just as soon as possible after receiving a notice from the IRS or state/local taxing authority.
Our services in representing taxpayers falls into three distinct categories:
Everyone wants to know if the IRS is increasing the rate at which tax returns are audited, and the answer is a resounding “yes”. However, the odds of being audited are still remarkably low. The vast majority of audits and examinations are targeting obvious mistakes and aimed at discovering potential errors which result in additional tax assessments.
Examinations may be automated, which requires a reply to automated notices issued by the IRS. Automated examinations are generally resolved through the mail and focus on one or a handful of items reported on the tax return. If corrections are necessary, the IRS records the correction in your tax transcript and provides a written detail of changes made to the tax return. A notice of assessment or refund may follow, depending on the outcome of the examination.
Examinations may also be conducted through the mail or in-person. This type of examination often involves a greater response requirement and can encompass the entire tax return. The examiner will request to review all available documentation to support items reported on the tax return. While the IRS may request that the taxpayer be present for phone calls or appointments, you have the right to have your representative present simultaneously. As your representative, our office also assists in negotiating items under review as well as the conclusion of an audit.
Tax returns are generally not amended during an examination.
When resolving examinations, if our office did not prepare the tax return, we will assist in compiling the documents requested and ensuring that the items you reported on the tax return are defended as best as possible. We will also assist in formulating arguments and raising tax code citations with respect to items that may be in question.
The simplest methods to avoid an audit are to confirm the accuracy of tax returns and avoid questionable reporting. When preparing tax returns, our office assembles documentation and regulatory citations to support the tax return in the event of an audit. While no one can guarantee a tax return will not be audited, preparedness is crucial to defend the tax return in an audit.
The process of collections begins with filing the tax return. Any balance due is assessed by the IRS and state/local taxing authorities. If a tax return is not filed, taxing authorities have the right to create a substitute tax return for you. No favorable elections will be taken on your behalf in this instance. We generally recommend that the substitute not be accepted and that a correct tax return be filed, even if a substitute has already been prepared on your tax record.
Once the income taxes are assessed, a bill is issued, and unpaid amounts are moved toward collections. As collections progress, the IRS or taxing authority will ultimately move toward garnishing wages or seizing assets. Of course, notices are mailed before each action is taken.
Ignoring these notices will result in forfeited hearing and appeal rights and loss of favorable treatment should you be eligible for an Offer in Compromise.
Our office will first review collections notices to confirm accuracy. Any inaccuracies in collections notices must be resolved before any agreement to pay is made. If necessary, we will request a hearing or appeal on your behalf.
If the amounts to be collected are correct, attempts to postpone collection may be deemed frivolous by the IRS or taxing authority, and additional sanctions or penalties may be assessed as a result.
Insufficient funds to pay the balance due is a common reason taxpayers will delay responding to collections notices. In most cases, the best course of action is to request a payment plan as soon as possible.
Taxpayers who are experiencing economic hardship or can demonstrate extenuating circumstances may be eligible for relief, such as an Offer in Compromise or Currently Not Collectible Status.
We are sometimes asked if the IRS Fresh Start Initiative is an available option. Fresh Start was a temporary relief program which has been terminated. In its place, the IRS expects that any unfiled tax returns be filed, and then, if the taxpayer is eligible, an Offer in Compromise be submitted.
Taxpayers who are unable to pay income taxes because of economic hardship may qualify for an Offer in Compromise. It is important to note that offers filed early in the collections stage generally qualify for a temporary hold on collections activity.
An economic hardship must be demonstrated through supporting documents, including proof of income, proof of assets, and proof of debts.
An Offer in Compromise may also be submitted for exceptional circumstances even if the taxpayer has sufficient income or assets to pay the tax. An example may be real property valued in excess of the tax amount due, but the taxpayer can provide documentation that a loan cannot be obtained against the equity. There may be other unique circumstances which are eligible for consideration.
Our office will review your case to determine if a reasonable argument can be made. The average acceptance rate of Offers in Compromise is 50%, and even well-supported offers may encounter resistance by the IRS.
Innocent spouse relief and injured spouse relief may be available to taxpayers who are facing collections as the result of action taken by a spouse. Common scenarios include spousal abuse, coercion, and failing to report income about which the innocent spouse had no knowledge.
Filing a joint tax return presumes that both spouses have knowledge of all items reported on the tax return, unless an exception under the innocent or injured spouse relief applies.
It is sometimes advantageous for spouses to file separately, particularly if doing so makes relief other available.
A: Our most important role is serving as a buffer or mediator between you and the IRS. We can interpret IRS notices and requests and seek to narrow the points of disagreement as much as possible. Another important role is to refuse inappropriate requests for information and ensure only the information needed to complete the examination is provided. We also assist in identifying and gathering documents required to respond to the audit and cite regulatory authority to support positions taken on the tax return or in the audit.
A: An Enrolled Agent enjoys unlimited practice rights before the IRS, which means that our office can represent any taxpayer in any tax matter before the IRS. An Enrolled Agent also enjoys the attorney-client privilege with respect to tax matters.