You may be wondering why we chose to write on this topic. The reason is it reinforces our basic operating principle. That is, as a comprehensive Tax Resolution firm we choose to ALWAYS have expert CPA’s AND tax attorneys on staff. With this setup, every client gets the benefit of having not only an expert accountant working on the numbers, but also a second set of eyes reviewing their case from a legal perspective. By far, this is the best approach to take in order to reduce tax liability and secure a long-lasting solution.
To show you this idea extends beyond our principles, there was a recent article about this very topic in the industry journal AccountingToday.com expressing the importance of having a CPA and Tax Attorney team up to resolve these types of issues.
Here are a few choice ideas to consider when deciding who to use to resolve your tax issues:
- The IRS allows only certain professionals (CPAs, Enrolled Agents and Tax Attorneys) to represent you in IRS tax matters
Having qualified experts provides significantly better results. Anyone, even the taxpayer themselves can obtain “A” result. The question is “Does the result solve the taxpayer’s problem”. With qualified professionals, the answer is “yes”. And with a team of qualified professionals, no stone is left unturned.
- Sometimes having an attorney at your disposal provides a much needed alternative. Some cases require an appeal to reach the desired results. Other cases may require filing a petition in tax court. While either of these may be done without an attorney, not using one is usually a foolish choice.
To illustrate our point, see this excerpt from Accounting Today discussing the importance of have access to both a CPA and tax attorney:
“It is particularly so in the typical unagreed income tax audit, which occurs when the taxpayer and IRS revenue agent cannot agree on audit adjustments at the conclusion of an audit.”
We believe that if the taxpayer “cannot agree on audit adjustments” or just as important, what the IRS will do with regard to collection matters, the CPA/attorney team is always the right combination to remedy the differences in opinion. Who do you want to address your concerns?
- The underpaid and overworked representative of the enormous, self-interested bureaucracy that is known to make large-scale errors in judgment or
- Highly-experienced tax professionals motivated to make sure you pay what you can afford taking advantage of current tax law
Let’s take a closer look because as usual, the “devil” is in the details. Here are some terms you may want to review:
The Internal Revenue Manual (IRM) – the IRM is the official compendium of guidelines the United States Internal Revenue Service (IRS) prescribes for its personnel.
Revenue Agent (RA) – this is the name the IRS labels the person who conducts an audit. Their job is one of assessment. That is to determine how much additional liability an individual or company should pay. RA’s do the same type of work on non-profits and trusts. They may be assigned even the most complex audits required by the IRS.
IRS Revenue Officer (RO) – RO’s are charged with collecting tax. Revenue Officers focus on collection cases from simple to challenging. They attempt to collect using various tools including letters, phone calls, levies and wage garnishments.
Unagreed income tax audit – this label is given when a taxpayer and an IRS Revenue Agent cannot agree on audit adjustments at the conclusion of an audit.
Agreed Cases – this label is given when a proposed adjustment is accepted by the taxpayer. These cases may include the taxpayer providing additional information to lower the liability prior to the assessment being made.
30-Day Letter – this is the initial report the Revenue Agent issues (sometimes it is captioned a “30-Day Letter” and other times not) along with paperwork that advises the taxpayer how to either concede or appeal the findings. The taxpayer may file a protest letter within to the Revenue Agent within 30 days (the reason the letter is called a 30-Day Letter) of the date of the letter.
Protest Letter – this is the letter that the taxpayer sends to the IRS Revenue Agent stating the basis for the taxpayer’s disagreement. If also requests a conference with the Office of Appeals.
Statutory Notice of Deficiency – also known as a “90-Day Letter” or “stat notice,” this is what the taxpayer receives once the liability has been assessed. If the taxpayer wants to protest the amount at this stage, they must file a petition with the Tax Court within 90 days (or 150 days if living abroad) of the date of the letter. Along with the petition, the taxpayer or their representative may write a letter calling it a supplemental protest letter, and submit it with the petition. This letter will become part of the file for consideration by the IRS counsel.
We have travelled down this pathway many times over the past 25 years. This is not the answer for everyone but when it warrants doing so, there is no substitution. We understand the intrinsic value that is provided by partnering a seasoned CPA with an expert tax attorney.
If you need highly qualified representation in the area of tax collection or audit with either the IRS or the State in which you live, feel free to contact the Tax Resolution Institute at (877) 829-8370 or use our handy contact form.
*This article is presented for informational purposes only and should never be considered definitive tax or legal advice. Tax matters have serious financial implications and always benefit from expert counsel due to their depth and complexity. If you need expert tax resolution or audit help please contact the Tax Resolution Institute at (818) 704-1443 for immediate assistance.