The IRS has decided to audit you, and you need someone to represent you.
To be fair, there’s a very long list of situations where this can happen, including all of these scenarios:
- Penalty relief
- Innocent spouse claims
- Adjustment of assessment
- Claim for refund
- Voluntary disclosure issues
- Asset forfeiture
- Anything to do with collections (levies, Currently Not Collectible, installment agreements, offers in compromise, bankruptcy)
- Complex examination
- Appeals Office matter
- Anything involving a potential criminal prosecution
But that doesn’t make it any less scary. And no matter what your problem is, you need good representation.
First of all, understand that there are several “levels” where you need representation. The first is the audit, where you present your case to the IRS, either on your own or with professional help. If you’re not satisfied with the results you get there, you can go on to file an appeal. If you don’t like the results you get THERE, you can go all the way to the top and take on Tax Court, where you “sue the IRS.”
You can pick who you want to defend you during this process – but make a wise choice.
Your tax preparer can represent you under very limited circumstances – only if they actually did your return and signed it. Their expertise will be very limited. Probably not a wise choice.
Certified Public Accountants are also pretty low on the tier of people you want defending you. They are trained in tax planning and examining financial statements, and they can handle a tax audit, but they can’t handle tax collection matters like foreclosure and lien proceedings. Quite simply, they don’t have the training. They can be very useful in preparing your case for the IRS, but don’t ask them to represent you at higher levels like an appeal or tax court.
In addition, not all CPAs are even qualified to represent you at an audit. They’re only permitted to do so if they have qualified as an Enrolled Agent (EA), a taxpayer representative who has “demonstrated technical competence in the field of taxation” and received a right to practice from the U.S. government.
CPAs must be EAs, but EAs don’t have to be CPAs in order to represent you. Does that make sense? ANYONE (not just a CPA) who has taken the government exam can qualify as an EA, and thus be technically permitted to represent you at an audit. EAs have the capability to prepare tax returns and handle routine audits – but once they get into more difficult tax collection areas like offers in compromise and liens, they are usually lost.
A tax attorney is the “gold standard” of representation (if you find the right one, of course). They can and do use input from EAs and CPAs in preparing their case, but they are qualified to handle complex tax collection matters all on their own. Offers in compromise, audits, payment agreements, potential criminal matters – the tax attorney can represent you no matter what your problem is.
If you have any questions, or need tax representation, give us a call at 844-841-9857, or schedule a free consultation here.
As a business owner, you know everything there is to know about your industry. You could be an expert on your specific business, but how much do you know about business taxes? If you are like other business owners, you might not know a lot. Luckily, there are professionals who can guide you through the basic and specific tax...
If your loved one recently passed away, you may have many questions about filing income tax for them. Perhaps the most important thing is to understand that you are not alone. Dealing with a deceased’s unpaid taxes can be challenging. For example, who is responsible for paying taxes when someone dies? Do IRS debts go...
If you have a tax balance with the IRS, you may be wondering if you can get a passport. While having your passport renewal denied or revoked is a possibility, it depends on the amount you owe the IRS. If your taxes become seriously delinquent, the IRS can take action against you, leading to the...
Most employers in the United States completely shut down or suspended operations during the COVID-19 pandemic. To help such businesses, the federal government implemented various policies, including the Employee Retention Tax Credit (ERTC) or Employee Retention Credit (ERC) program. However, it can take the IRS months to process claims because of the number of applications the...
If you’re a small business owner, you’ve probably heard about sales tax. Knowing how to collect, record and remit sales tax can be complicated, especially as your business grows. Keeping up with changing tax regulations can also be challenging. Paying sales tax for your small business is essential because failing to do so can result...
The Employee Retention Credit (ERC), also known as the Employee Retention Tax Credit (ERTC), will unveil some major changes at the start of 2024. Starting in September of 2023, the IRS Commissioner placed a moratorium on new ERC applications through the end of the year, giving the IRS time to update its guidelines and develop a new...