Reasons to Hire a Tax Attorney
What can it mean if my name comes up before this powerful agency? Do I need a tax lawyer? When you’ve got IRS tax problems, it’s very important to take care of them very carefully. IRS tax matters are a very crucial and sensitive issue and a slight mistake in the process can cost you very dearly in the form of loss of money, time, which can get you frustrated and may land you in jail. The tax laws and the legalities involved in the process of tax settlement of your IRS taxes can be very complex and you may not understand it at all.
There would be many questions pounding your mind at this stage such as:
1. Should I hire an IRS tax relief attorney if I’m facing an IRS audit?
2. Is it expensive to hire an attorney?
3. When must I hire a tax attorney to represent me in my IRS tax debt dispute?
4. Can I Really Settle my Tax Debt with the IRS for Pennies on the Dollar?
5. Should I hire a lawyer to confront the IRS or not? …………and many more…………..
Suggested Read: What are Tax(definition) and its types?
In this article, you will get all your questions answered.
When you want to save your business and yourself from IRS penalties, interest, and possibly criminal actions (including jail terms), it is best to hire an expert in tax representation, who will be able to handle your situation better. The tax lawyer, CPA or the IRS licensed enrolled agent understands everything about the tax laws and they know what to do in different situations. They’ve got the expertise to devise a detailed plan of action for your case & follow it for implementation. Tax representatives are experienced, licensed, and trained to take care of the technicalities that are involved in the settlement process and tax resolution.
Most taxpayers feel a chill about dealing with the IRS. It’s likely worse today than a few months back. Acting Commissioner Danny Werfel’s report outlines actions to fix problems at the IRS. But many will continue to wonder.
Reason One – Exemption from testifying
If you’re in trouble with the IRS, only an IRS tax attorney can provide you with the attorney-client privilege. Why’s the attorney-client privilege vital for tax law cases? Simple – your attorney’s exempt from testifying against you. Exactly, should your tax liability case go to trial, and you’ve chosen to work with a tax preparer or CPA for help, your CPA actually could be made to testify against you!
Reason Two – Able to Make the Right Decisions
Only a Tax lawyer will possess experience in achieving tax settlements. While a CPA might be familiar with some tax settlement programs, they won’t have a full understanding of the ins and outs of the various programs. Tax laws & codes are complex and change yearly many times. Moreover, there are several available programs for a concerned taxpayer can utilize to reduce or settle the tax liability amount owed but only an experienced tax attorney would know how to qualify you & to determine both the best program to make use of. Being under the collections process from the IRS is a dangerous time and the wrong advice can be very costly. Do not take any chances with your financial future, hire an IRS tax attorney and get IRS Tax Relief.
When should I hire a tax attorney?
Needing to hire a tax attorney probably means you are in some hot water with the IRS for one reason or another. The tax attorney you choose can either correct the problem or make it a million times worse. This is why certain questions need to be asked before you hire an attorney. You want to make sure you have someone knowledgeable, truthful and working for you, and not against, on your side. Find the tax attorney who is going to cool that hot water for you.
There are deadlines where problems must be solved to evade further penalties & the poor lines of communication with the IRS don’t help in the resolution of your problems. If the IRS ignores your efforts to correct the mistakes, it is time to contact an attorney. An attorney can draft your letters to the IRS in a more direct way that is guaranteed to get the attention of the IRS. Moreover, the majority of tax attorneys have direct contact information for the necessary branches of the IRS where matters must be handled and could negotiate matters via phone instead of through writing, effectively ending the communication issues.
IRS Tax Disputes
Most tax disputes happen in the form of an audit of a single or numerous past tax returns. If the IRS informs you of an audit, we suggest hiring a tax attorney fast.
On your behalf, your tax relief attorney can be in communication with the IRS, be present during your audit and help negotiate a settlement, if necessary. Having experienced legal counsel helps in ensuring that you do not overpay as a result of your audit.
In some cases, taxpayers ignore warnings and letters from the IRS because do not know how to respond or they are scared. In such cases, the IRS might have no other choice but to threaten you with criminal charges for tax evasion. If you learn that you are the target of an IRS criminal investigation, you will want to hire a tax lawyer—and do it fast.
Your tax lawyer can reassure the IRS that you’re taking its investigation seriously, work with the IRS in an effort to help you avoid criminal charges & represent you in court if you’re charged with a tax crime.
Suggested Read: What is a Back Tax? and How to Negotiate Back Taxes With IRS?
Offer in Compromise
An offer in compromise –“OIC”–is an agreement between the IRS and a taxpayer that settles the tax liabilities of the taxpayer for less than the owed full amount. The IRS will only accept your OIC if you convince it that:
- You’re not able to pay the amount fully in a reasonable time, either as an over time or lump sum via a payment agreement
- There’s doubt as to the amount of your tax liability (unusual), or
- because exceptional circumstances, payment in full would lead to an “economic hardship” or be “inequitable” or “unfair” – for example, you can’t work due to health problems, or you’d be left with no money to pay your basic living expenses if you sold your assets to pay your tax bill in full.
If you are unable to pay your federal tax debt, the IRS offers a way to get a new start called an Offer in Compromise. The Streamline IRS Offer in Compromise program’s straightforward with open lines of communication and specific criteria. For any taxpayer, this program is very manageable to handle themselves. But those who don’t have the qualification for the Streamline Offer in Compromise program must think about having a tax attorney hired to take care of their negotiations with the IRS. The IRS has until 2 years to reject or accept an Offer in Compromise & the higher your owed total amount, the less likeliness the IRS is to accept your settlement offer. To begin the OIC process, you must file IRS Form 656, Offer in Compromise and pay a $150 nonrefundable application fee. For full details on the OIC program, see the
IRS Form 656 Booklet, available at www.irs.gov.
Tax fraud and tax evasion are criminal offenses that the IRS charges citizens with when they’re refusing to pay taxes, file tax returns, or show every one of their income sources. These criminal charges will bring them public humiliation, incarceration, prosecution fees, interest on the tax owed, and fines. Your name, city, state, and crime are all published on the IRS website. If you have been negotiating with the IRS and two agents come to your office or home to ask further questions, it is time to hire an attorney. Remember that when a formal investigation is opened with the IRS, any information you provide them might be self-incriminating. Don’t try handling these severe charges without an attorney who could protect your rights & frame your arguments in the most favorable way.
Know that lawyers are bound by strict confidentiality rules. Even if you end up hiring a different attorney, the lawyers you meet with cannot share the information they learned with the IRS or anyone else.
Some questions to consider :
- How Long the Firm Has Been In Business?
If you know how long a firm or tax attorney has been in business, then you know how much experience they have. You want an attorney that is seasoned in their profession and that is used to dealing with the IRS.
- Does the Attorney Make You Feel Like You are at a Used Car Lot?
If your attorney uses the sale pitch technique to gain your trust and reverence, then you need to run out the door. Any attorney who needs to sell themselves with gimmicks and flashy talk is overcompensating for their lack of success.
- Does the Tax Attorney or Law Firm Want All of Your Money Up Front?
If you answered that with a big fat yes, then you need to run from this law firm. A good attorney would never request all of your money upfront. A retainer yes, but not all of the money. When you pay an attorney everything at once, this doesn’t serve as an incentive to go that extra mile for you.
Meeting a Lawyer: Things to Consider When Hiring an Attorney
What Questions Should I Ask Before Hiring a Tax Attorney? :
- How long have you been practicing law?
- Do you simply practice tax law, or do you also work in other areas of practice?
- Have you handled tax situations similar to mine previously?
- What is your evaluation of my situation? What works for me & against me?
- If I hired you, what course of action would you recommend?
- Do you charge an hourly rate or flat fee, or do you make use of some other billing structure?
- Can you estimate my overall legal fees?
Now, that you have finalized your tax attorney, you should have an overview of the process which IRS follows. A tax lawyer can help in getting the IRS to accept an offer in compromise.
The IRS looks through your assets and income to have your “reasonable collection potential” determined. You must give detailed information about your financial situation on IRS Form 433-A, Collection Information Statement. This is inclusive of verifiable information about your credit card debt consolidation, income, assets, available credit, investments, and cash. In addition to the property, the RCP also includes your anticipated future income, fewer amounts allowed for basic living expenses.
The amount of your offer should be equal to your assets’ “realizable value” plus the amount of money the IRS could take from your future income. For example, if your assets are worth $20,000 and the amount of your future income that’s available to the IRS is $10,000, your minimum offer must be $30,000.