Why You Need a Tax Professional
Colleen E. Harrison, Enrolled Agent
I've collected some important information on the internet and using this information plus my own experiences in the tax resolution business, I want to share this information with you in order to assist you in making your decisions. You may find that you have additional reasons to do so. Add them to my list.
1. You are afraid of dealing with the IRS on your own.
You can't discount the "fear factor" as a reason to pay a tax professional for representation. Fearful people get themselves in deeper trouble by putting their proverbial foot in their mouth. The objectivity of a tax professional, or third party, is sometimes essential for resolving a tax case. Furthermore, you can't underestimate the PEACE OF MIND of having a qualified individual handle your dealings with the IRS.
2. You owe a lot of money to the IRS or the State.
The more you owe the IRS, the higher the stakes are, and the more aggressive the IRS will get. You will benefit from having a tax professional lowering the temperature of the negotiations and handling the matter for you. Furthermore, the IRS is changing its handling of large dollar cases -- more scrutiny is possible.
3. You are being levied by the IRS or on the precipice of aggressive collection action.
Levy release/reductions require a lot of work in a very short period of time. A qualified tax professional like myself who knows the ropes to get the levy fixed quickly.
4. You haven't filed for many years and/or the IRS filed returns for you (Substitute-For-Returns - SFR's).
The tendency of a non-filer is to overestimate the task of resolving their tax situation -- thinking that they need to file TEN returns -- with information they lost in their flooded basement, e.g. Most non-filer situations are NOT as a bad as the taxpayer thinks. A licensed tax professional can clear the air by researching the taxpayer's record and properly determining the MINIMUM needed to be done. Furthermore, "SFRs" do not always need to be fixed. In some cases, your representative will recommend that the returns STAND as they are while the debt is negotiated another way.
5. Your case is assigned to a Revenue Officer or Automated Collection Systems (ACS).
If your case is assigned to one of the above, that means serious business: you are in jeopardy of aggressive collection actions. Workers in these divisions are HUMAN: capable of error and OVERSTEPPING their powers. Having a representative automatically lowers the temperature of the negotiations -- making sure that your rights as a taxpayer are defended, preventing the agencies from levying you.
6. You run a business that owes 941 - Payroll taxes or State taxes
Falling behind on 941 taxes is pretty common and when the dollar amount owed increases you are almost guaranteed to have your case assigned to the field.
7. You are being audited by the IRS on your 1040 or Business Tax returns
If your returns have been selected for examination by a field agent or thru a "correspondence" audit by the IRS -- you might benefit by having a licensed tax professional use all of his/her tricks of the trade to insure that you are getting the best deal.