You Need Professional Tax Representation When You Have a Problem with the IRS (even if you don't think you do) (Part 2)

After last week's article in my weekly newsletter, Resolving Tax Debt, do you think it still might be a good idea to take on the IRS by yourself?

Spoiler alert: it's not.

I'd like to stop this article right there after "it's not," but my director of PR (me), is telling me you can't just post that and give no further explanation.

But really, wouldn't perform your own root canal...would you?

Introduction:

Look, I actually do get why theres some business owners who think they can negotiate with the IRS by themselves. They built their business form the ground up! They know their business financials inside and out! Who could do it better than me!

I think they figure something to the effect of "I've negotiated 1001 deals with vendors and customers while running this business. Negotiating with the IRS will be no different."

There's only one problem: It's COMPLETELY different.

Negotiations with the IRS are not an informal back and forth where you end up meeting in the middle.

There are extensive rules and regulations that guide discussions including the Internal Revenue Manual and the Internal Revenue Code. Plus, the IRS is the largest and most powerful collections agency in the world.

They have a ridiculous power advantage over you.

I've watched countless brave souls try to go it alone, only to come running for help when all hell breaks loose, sometimes too late.

This week's article for Resolving Tax Debt is Part 2 in our series, explaining why hiring a tax professional is a must.

Why This Topic Is Important:

The IRS has a huge advantage over you.

They have powers that no other entity has anywhere in the country and their methods--levies, garnishments, seizures--can turn your financial life upside down.

Last week we discussed reasons 1 through 4 for why you should hire a tax professional when you have tax debt.

Today we discuss reasons 5 through 8 including:

5. Swift Action is Needed for Levies and Garnishments

6. The IRS Requires Compliance and you Have No Idea What That Means

7. IRS Agents and Officers Overstep Their Boundaries

8. You're Personally Liable for Business Payroll Taxes

Let's talk about it.

5. Swift Action is Needed When Your Bank Account is Levied, or your Pay Garnished

When the IRS comes for your assets, they don't send a polite FYI.

Yes, they are required to send letters giving you a "Final Notice" that you may be subject to "Levies and Garnishments" but the mail comes haphazardly over time.

They may not levy for years and you don't get a reminder notice about that "Final" notice they sent to you last year warning you that they were going to take your money.

Levies and garnishments come out of nowhere and they come fast and furious.

Everything is a blur.

You don't generally get that money back, but there are times when you can and you need someone with knowledge of the process to make that happen. If you're sitting around researching "best ways to release an IRS levy" on google, your money is long gone.

Hire a tax attorney and give yourself a chance to get your money back.

6. The IRS Requires Compliance and you Have No Idea What That Means

Compliance is the top priority for the IRS and they won't even talk about resolving your tax debts if you're not compliant.

What do you think "Compliance" means? You may think you do but you actually have no idea. Compliance is a term of art when it comes to the IRS.

There's all sorts of caveats and situations that make the definition unclear. Are your returns unfiled or do you have substitute returns on file? How do you handle substitute returns compared to unfiled returns. It's a labyrinth of confusion.

What if you haven't filed a return for the past 10 years? You know you don't have to file all ten years, right?

A tax attorney will cut through the confusion quickly including

Identifying the minimum filing requirements you need to address to achieve compliance.

Identifying and preparing only essential returns, saving you time, money and sanity.

Advising whether you should replace substitute returns with original returns or otherwise leave the substitute returns in place.

With a pro, the IRS compliance maze becomes a straight path.

Otherwise, enjoy your time wandering aimlessly while the IRS continues to take money form your bank accounts.

7. IRS Personnel Overstep Their Boundaries... Alot.

IRS agents and officers are supposed to follow the rules.

Surprise!

They don't always.

If nothing else, IRS personnel are human and they make mistakes. Sometimes it's an honest mistake and many times they don't have proper training but there's a real possibility they get mad and turn your case into a personal vendetta.

As I always, say, You don't know what you don't know! And when you don't know the rules, you're an easy target.

Having professional tax representation,

Protects your rights and ensure you're treated fairly.

Challenges any abusive or unfair practices by the IRS.

Acts as a conduit between you and the IRS, preventing personal biases from affecting your case.

You'll find yourself in WAY over your head if you try to fight overzealous IRS agents and officers solo.

8. You're Personally Liable for Business Payroll Taxes

For all the business owners, do you realize that you very well may be held personally liable for unpaid business payroll tax debt?

The IRS expects timely payment of taxes withheld from your employees' checks for Medicare and Social Security. When you fall behind, or use that money to pay another bill it's not just your business that's at risk, your personal livelihood is at risk as well.

When you're behind on payroll taxes, you need to clean up the mess as quickly as possible to try to stave off being held personally liable.

But you don't have long and it's a whirlwind.

Having a tax attorney allows you to step away so they can

Handle the IRS investigation into the payroll debts and who might be personally liable.

Argue against your personal liability, including filing appeals, to give you breathing room and help you come up with a plan to address personal liabilities before they are formally assessed.

Negotiate an an arrangement with the Revenue Officer to get you into compliance, get your payroll back on track and resolve tax debt owed from both the business and personal perspective.

It's no easy task.

Imagine explaining to your family why your personal assets are at risk because you decided to DIY your business tax troubles.

Yikes.

TL;DR:

A tax professional has the knowledge and know how to take quick action when a levy or garnishment is assessed before your money is long gone.

The IRS requires compliance and you have no idea what that means which makes having a tax professional in your corner pretty damn important.

IRS personnel overstep their boundaries...alot and if you don't know the rules you're an easy target for being taken advantage of.

You're personally liable for business payroll taxes debt; did you know that? More importantly, do you know how to get yourself out of that mess?

After reading my newsletter the last two weeks, specifically the articles "You Need Professional Tax Representation When You Have a Problem with the IRS (even if you don't think you do)" part 1 and 2, does it seem like taking on the IRS by yourself is a good idea?

PS: Got an IRS horror story where you didn't have a tax attorney?

Alternatively, have you been in a situation where you had a tax professional representing you and you didn't think you needed them?

I'd love to discuss!

Share it with us in the comments below

I'm gracious for all of you who take the time to read my newsletter each week and nothing is sweeter than a comment!