Debt owed to any creditor is never ultimate, but problems with the U.S. Internal Revenue Service elicit a special dread. Not only is the IRS a uniquely powerful creditor, but it is also a uniquely large and complex bureaucracy. When taxpayers receive letters from the IRS proposing an audit, change to tax returns, or demand for payment, they are often unsure how to proceed or whether the proposed changes or amounts owed are even correct. The scope and complexity of tax controversies can lead taxpayers to make poor choices, including attempts to delay payment or avoid the IRS altogether.
Ads promising to “settle with the IRS for pennies-on-the-dollar” can be alluring. But a taxpayer may reasonably wonder “can someone really settle with the IRS for pennies-on-the-dollar?” Well, maybe. There are certainly ways that one may end up settling with the IRS for far less than is owed. A representative can file an Offer in Compromise, request a Collection Due Process hearing, or take any number of other measures to reduce the debt. But as a government bureaucracy, the IRS is much different from other creditors. The IRS has its own highly-developed procedures and regulations which are designed to protect taxpayers and will do so when properly navigated.
In many situations, a taxpayer can benefit from the advice of an attorney who offers tax counsel and who will engage with the IRS on the taxpayer’s behalf. For effective representation, an attorney should have a sound understanding of the tax laws, the ability to apply those laws to the individual taxpayer’s situation, and sufficient knowledge of the IRS and its procedures. Once appointed, an attorney will identify which issues really matter, which issues may benefit the taxpayer, and which issues may go against the taxpayer. The attorney representative may file an Offer in Compromise, request a Collection Due Process hearing, or take any number of other measures to resolve the tax controversy.
Effective tax representation can mean the reduction of all of the stress and collateral issues around an IRS audit or collection action. Consider seeking the advice of counsel should you receive an unwelcome communication from the IRS.