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Your odds of a favorable IRS tax outcome are much better when you work with a tax professional.

10 Things to Look for in a Tax Resolution Expert

The letters and the phone calls from the IRS are coming more frequently. You figure if you don’t open the letter or answer the phone, the problem will go away. But it won’t. The good news is you have options. You just need to know how and when to use them. Whether it’s late filing, challenged deductions, a missed foreign bank account reporting, or any of many other issues, one thing is certain: Your odds of a favorable IRS tax outcome are much better when you work with a tax professional to develop an effective plan rather than going it alone. Here are some things to consider when engaging a tax resolution expert.

  1. They Know What’s at Stake – They will compile a full accounting of your assets that are at risk of seizure. These can include real estate, wages, bank accounts, business equipment and more. They also understand other long-term implications such as a tarnished credit history or the decreased ability to start a new business.
  2. They Help Level the Playing Field – The IRS is a massive collection agency with nearly boundless resources. They are also becoming more aggressive with respect to collections, which means you are now less likely to fly under the radar. Working with a tax resolution expert—particularly one who has experience working for the IRS—makes it less of a David vs. Goliath scenario.
  3. They Have Credibility – There are plenty of “boiler room” operations that promise much on their subway ads or late night commercials, but often fail to deliver. Make sure you deal with a well-established firm with practitioners who are CPAs, enrolled agents or attorneys. They should belong to industry organizations such as the American Institute of CPAs and/or the National Association of Enrolled Agents, as well as write for or speak at conferences and events. Will the firm provide references? Do they have any type of service or BBB rating?
  4. They Have a Breadth of Experience – Your advisor should be able to tackle IRS action regarding individuals and businesses, along with payroll and trust fund issues.
  5. They Know the Options – It’s best to remember that the situation is not hopeless. Your tax advocate should be well versed in viable options such as offers-in-compromise, installment payments, innocent spouse, abatements, allowable expenses and appeals.
  6. They Manage Expectations – Many companies promise to make all the financial pain go away. If that’s just not possible—and it often isn’t— your professional shouldn’t hesitate to tell you so.
  7. They Navigate the Complexities – Do you really want (or have the time) to deal with Letter 3586, Form 4180, Revenue Procedure 2002-26, IRC 6103, CP Notice 504, etc.?
  8. They Are Part of a Team – They should have a staff of (or access to) legal, bankruptcy, valuation and other experts who can provide 360-degree service.
  9. They Are Discreet – Not a situation you want to broadcast, your expert should be unobtrusive as well as take the appropriate measures to safeguard your information.
  10. They Have a Track Record – They should be able to provide some quantitative proof of their successes.

When all of your assets are hanging in the balance, you really need to stop, take a deep breath and think twice about compromising on your tax resolution professional. 

Daniel Gibson CPA has almost 30 years of experience in public accounting, providing accounting, tax and consulting services. Dan is a member of the AICPA and NJ Society of CPAs.

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