Questions You Should Ask a Licensed Tax Lawyer
BEFORE You Hire Him/Her
1. How much experience do you have representing taxpayers before the IRS and what is its nature?
Look for a pro who has at least five years (full time) experience dealing with the IRS in the areas of Collection work and Appeals.
Experience alone, or number of years alone, isn’t a sufficient criteria. He/She must have experience working with taxpayers who owe money to the IRS (large amounts of money), and who know how to represent taxpayers who are “non- filers” of their tax returns for multiple years.
Make sure the tax professional has lengthy experience helping taxpayers set up Installment Agreements (IRS payment plans).
Make sure the tax professional has lengthy experience helping taxpayers with Offers in Compromise (IRS settlement agreements where you settle with the IRS for an amount which is less than you owe in tax and penalties, sometimes a good bit less than what is owed).
Make sure the tax professional has lengthy experience having taxpayers declared “Currently Uncollectible” by the IRS (this status prevents the IRS from garnishing your wage and bank accounts until your financial situation improves).
Make sure the professional has lengthy experience dealing with the IRS’ Appeals division, for example the division which handles appeals concerning Offers in Compromise (IRS settlement agreements).
2. Can I get an extension of time to pay taxes if I can’t pay by April 15th?
Yes. IRS Form 1127, Application for Extension of Time to Pay, can get you up to six additional months to pay, without penalties (though interest does accrue).
3. What is the best way to prevent a wage levy (garnishment)?
Establish an Installment Agreement, which is an IRS payment play. IRS Form 9465, Installment Agreement Request, can establish either an installment agreement or Uncollectible Status, both of which eliminate the potential for levies..
4. Can federal income taxes ever be discharged in bankruptcy?
Contrary to public misunderstanding, and even ignorance among some tax professionals of limited experience, taxes can be discharged or “bankrupted against”.
The ability to discharge tax debt depends on some special rules though, such as:
How old the taxes are;
How much equity you have in your assets;
Depending on which type of bankruptcy you are wanting to file, you may have had to have filed the tax returns for a specific period of time;
How long ago the taxes were assessed.
5. How can an Offer in Compromise (IRS settlement offer) help my problem?
An IRS settlement Offer is a means of negotiating a reduction of your tax bill. In other words, it potentially allows you to settle your tax bill for less than you owe, and the IRS would consider your bill “paid in full” as long as certain conditions are met by you.
Most tax professionals don’t realize that there are FOUR different variations of the IRS settlement Offer.
If you qualify for filing a settlement Offer, the best type of Offer for you depends on the facts of your case.
6. Is there a way to get emergency relief if collection action by the IRS is causing a hardship for me?
Yes. The Taxpayer Advocate Service can order the IRS to stop action that is, or will, cause “significant hardship”.
7. Is it possible for a tax professional to represent taxpayers who have IRS problems, but who lives in other States?
Yes. IRS problems involve federal laws, and federal laws don’t change just because you live in one State or another State.
A tax professional who is truly licensed and authorized to represent taxpayers, can do so regardless of where he lives or where the Client lives.
8. Is it practical and convenient for a tax professional to represent taxpayers who live in a different State than the tax pro?
Yes. A tax pro is able to work with the IRS in any State the same way he does in his own State: by using the telephone, mail, email, and facsimile.
The use of the telephone, mail, email and facsimile makes it so that the taxpayer can choose a tax pro he/she trusts without having to hire one just because he is located near them.