Every year, thousands of people face an audit, levy, lien, or other collection effort by the Internal Revenue Service (IRS). Dealing with the IRS is serious business. The average person doesn't know where to start when faced with a tax issue. Do you try to represent yourself, or do you seek the assistance of a professional tax attorney?
“You may think you can do it alone, but you may not fare as well as you initially think,” said Travis Watkins, an Oklahoma City tax attorney.
“We often get calls from folks that have tried representing themselves and it didn't go so well. You may think you have nothing to hide and the IRS employee may seem helpful, but without knowing any of your rights and privileges with the IRS and tax laws it can get complicated."
For instance, more than half the referrals to the IRS' Criminal Investigation Division are from IRS field auditors performing “routine audits."
IRS agents are experts in understanding tax law, and the rights and powers that they possess. Audits and collection actions from the IRS begin with a written notice from the agency to the recipient, the taxpayer. Once a notice is received, the ball is in the tax payer's court how to respond to and prepare for the proposed IRS action.
“Usually, the IRS is demanding payment from you for a reason." They use an automated computer system that creates and sends collection notices.”
IRS notices may escalate in severity based on lack of action on the taxpayer's behalf. Certain notices open avenues for collection alternatives. No tax burden should be underrepresented."
Should You Represent Yourself?
“You probably are expecting that I will say, ‘Absolutely, you better hire an attorney.' Well, I'm here to tell you that may not always be the case. There are some situations where you may do better with the IRS than having a representative.”
Some instances when it may be okay to represent yourself would be, if you have received a paper audit from the IRS asking to prove to them why a certain expense is valid or why your numbers don't match with their numbers.
“If you owe less than about $2,500, it's probably not cost-effective for you to hire an attorney or a tax representative in that case.”
There are, however, some situations in which you should hire a tax attorney.
“You really don't want to handle payroll tax issues, for example, if you're a small or large employer.”
“You want to hire a representative, someone who works with the IRS every day, because the IRS is very severe when you owe payroll tax to the IRS. You want to be on a level playing field when in this situation.”
How Does A Tax Attorney Help?
The best defense against an industrious IRS employee is a tax professional who deals with IRS collections every day. A tax attorney, like Travis Watkins, is trained to understand the tax as well as your rights when you owe or may owe under an IRS audit.
“The first order of business is filing old tax returns. My firm creates a customizable plan that we can execute, based on the master tax file the IRS keeps on every taxpayer.”
Additionally, a tax attorney can help stop immediate threats to taxpayer's livelihood, such as levies, liens, and seizures of property.
“We hear across the board that because of tax problems, troubled taxpayers can't sleep at night.”
Is Doing It Alone Really Cheaper?
Many people steer away from hiring a tax attorney because they fear the cost.
“The cost of a tax attorney should not scare you,” Watkins said. “A common misconception is that you can't afford to hire an attorney.”
“You'll want to know what you're going to be investing in with your tax attorney and get a fixed fee, a flat fee if you can,” he said. “The sky is the limit if an outfit charges by the hour, because they will be sitting on hold at an hourly rate and be completely cost ineffective for the taxpayer.”
For more information call Travis W. Watkins Tax Resolution & Accounting Firm at (405) 454-8373 or contact us online.