Top Ten Questions Taxpayers Ask When Dealing With An IRS Problem

1. Do I really need a tax lawyer to deal with the IRS for me?

Yes. Dealing with the IRS can be complex, and most taxpayers are greatly outmatched when it comes to knowing IRS rules and procedure. Our office has other tax professionals (CPA's and Enrolled Agents) who can assist as well. Tax relief is not something you should try to pursue on your own, as your financial and emotional future is at stake. There is also a potential for IRS overreaching when it comes to sharing information with the IRS. The IRS doesn't tell taxpayers that anything they say can and will be used to collect a debt. They also don't tell them that they have the right to hire an attorney. Our clients sign an IRS Power of Attorney which allows us to take over communications and deal with IRS officials, so our clients don't have to. An experienced tax lawyer can help you achieve your goals for yourself and your family.

2. How much can I save with the IRS' Offer in Compromise program?

It depends. The IRS' settlement program or "Offer in Compromise" is determined by whether or not the IRS can collect the full amount of liability (including interest and penalties) within its deadlines. As each taxpayer's financial situation is different, each settlement is different. The IRS is the final decision maker of an individual's eligibility for this program. The average accepted Offer in Compromise in our office is about 10-15% of what the taxpayer owed. There are other IRS programs that may also achieve your goals if you are ineligible for the Offer in Compromise program.

3. When will my case be over?

Compliance and payment are a lifetime commitment. That is why we help our clients from year to year with their taxes. Currently, the IRS is taking from 6-9 months to process Offers in Compromise alone. Meanwhile, new collection attempts (levy attempts, for instance) are stayed/stopped. Most cases that don't require appeals are over in 12-18 months. You will need to stay in filing and paying compliance to make sure that all the relief you have accomplished stays in force.

4. How much are your fees?

Many factors are at issue in the fee, including our inability to accept other clients and other employment and in consideration of our power of attorney staying in full force and effect during representation. Most importantly, we will quote you a fixed rate, ie there are no on-going monthly bills in the great majority of cases. A liability of $50,000 would be about $5,000 in fees. Payment plans and financing are available for qualified clients.

5. Will I get thrown in jail for owing the IRS?

The inability to pay your tax debt is not grounds for jail time. The IRS cannot collect income tax if you're incarcerated so it is not in their best interest to pursue you in this manner. You can, however, go to jail for cheating on your taxes or fraud. Timely filing of your returns, even if there is a balance will prevent the hefty failure to file penalty.

6. I have gambling winnings; do I owe taxes?

Yes. A casino may require your Social Security number so it can file an IRS Form W2-G to report your winnings. Table games are not required to report the winnings on the W2-G, but not exempt from paying taxes. Even if you do not win above the threshold to fill out the W2-G you are still legally obligated to report your monetary gain to the IRS. You may write off losses up to the amount of your winnings, if you have sufficient back-up documentation to support these losses.

7. Will the government take my professional license?

Senate Bill 1040 requires Oklahoma state tax compliance before any professional can renew their license. That means medical doctors, physician assistants, chiropractors, commercial drivers, cosmetologists, dentists, embalmers/funeral workers, engineers, insurance agents, optometrists, pharmacists, real estate agents, security brokers and agents, pathologists, veterinarians, building inspectors, electricians, plumbers and emergency medical technicians (the list goes on and on) must be compliant with taxes in order to maintain a license in Oklahoma. Licenses will not be renewed until compliance and a resolution is established. There is positive news. If you have a license and a tax problem, taxation officials are not looking to take your livelihood, since you would not be able to pay them if that occurred. Hire a local tax attorney to work out an acceptable solution that gets your license renewed and your taxes paid.

8. I'm afraid they will take my home, can they?

The IRS is a powerful government agency that will utilize every tactic to collect the tax debt that is owed. If you owe the IRS taxes and are not compliant, the IRS will enforce collection in various forms: levies, seizures and public sale. There are little restrictions on the IRS' ability to initiate seizure. State homestead laws do not shelter your residence. Luckily, the seizure process is a last resort with the IRS and it takes a long time. Start working out a plan with the IRS now before the process proceeds further.

9. The IRS issued a levy on my bank account, what do I do?

If the IRS has issued a levy on your bank account, your funds will be frozen and you will not be able to withdraw. Your first step should be to contact an attorney. To get this released as soon as possible, you must present an acceptable alternative to the IRS within 20 days to negotiate the release.

10. Why should I choose an Oklahoma firm?

The IRS works through its local field agents and officers. Your best representation will come from tax professionals that deal with these local representatives every day. Our firm also offers financing for qualified clients.

The attorneys and licensed tax professionals at Travis W. Watkins Tax Resolution and Accounting Firm provide troubled taxpayers with a customized, actionable plan to file old returns, negotiate with the IRS and stop immediate threats to their livelihood, so they can get a good night's sleep again. Call 800-721-7054 for a FREE 30 minute consultation or receive our FREE download of Travis Watkins' short book, The Ultimate Survival Guide for IRS Problems.