IRS Problems Can Be Resolved With a Reputable CPA

04
February

A Certified Public Accountant is a numbers guy (or girl). They can successfully deal with the biggest agency out there that also deals with digits, the IRS. When your numbers don’t match up with the government’s numbers, you may have a problem on your hand, and a qualified CPA can help you.

A CPA has met state qualifications and is recognized as passing the Uniform CPA Exam. CPAs deal with all levels of financial planning and accounting, and have a role within the income tax preparation and resolution industry.

A CPA can act as your mediator and handle all levels of interaction with the IRS. In addition to tax return preparation, they can contact the IRS on your behalf and negotiate timeframes, deadlines and establish resolution. They are generally copied on the same notices that the IRS sends a taxpayer, and can respond accordingly.

There is a flood of tax representation firms that are eager to net new clients. IRS tax bills can quickly spiral into unmanageable debt, and once a Notice of Federal Tax Lien is filed and your debt becomes public, you’ll notice that the offers to handle your tax bill will start showing up in your mailbox.

How can you choose a successful CPA? And what types of IRS problems can they resolve?

Initially, when choosing a CPA, ask around. Likely many of your friends or relatives can recommend their CPA to you. The referral is appreciated by their CPA, who will see if they can provide you with needed assistance.

You also want to make sure that your CPA is experienced in the realm of tax law and IRS tax collections. Many CPAs may be former IRS agents themselves and have gotten out of the government sector in lieu of pursuing a private career in tax preparation and representation. If so, they will be an invaluable guide.

Go online and see if there are existing testimonials from former clientele. Check to see if the Better Business Bureau or the Office of Professional Responsibility (the government agency responsible for investigating allegations of misconduct among third party tax professionals) have any complaints or censures logged against the CPA.

Depending on your tax situation and the amount that may be owed, be prepared to provide your CPA with detailed financial information that the IRS will request in order to analyze your ability to make payment.

If a wage levy has been issued against your pay or bank account, your CPA may be able to help you with this. However, keep in mind that there are no special options or consideration afforded to a CPA, lawyer, or any other third party representative. If there is basis to release a levy, then the IRS will do so.

Your CPA should have experience in this area and be honest with you regarding the likelihood of any levy release. Many large tax resolution firms promise immediate relief, canceling wage and bank levies, lifting federal tax liens, and the like, but unfortunately, do not deliver. Be wary of these ‘guaranteed’ promises made before anyone has even looked at your case.

If you have seen the multiple radio and TV spots for IRS settlements and “penny on the dollar” programs, your CPA should explain to you that there is only one program that the IRS offers a taxpayer for a reduced settlement. It is called “Offer in Compromise” and the IRS has had this program for many years. There is no such thing as a “one time” window to settle debts.

The Offer program is designed for taxpayers to do themselves, but if your CPA has experience with them, they will know whether you qualify for one or not. Any CPA or firm that immediately wants to submit an offer to the IRS is only delaying collection of your debt.

The IRS will not accept an offer unless a taxpayer is current in the filing of all of their tax returns, and generally only after a detailed financial analysis has been taken which demonstrates that a taxpayer is a good candidate for the offer program. If an individual has an ability to pay the debt in full over time, or even to make a partial payment, then it is not likely that the IRS will accept a compromise.

Your CPA should also be able to advise you of what a Notice of Federal Tax Lien is, how it impacts your credit, and how it may come into play if the lien was filed on real property. The IRS generally only lifts a lien when the balance is paid in full.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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