Frequently Asked Questions
Question: What are some of the most common and costly mistakes taxpayers make representing themselves before the IRS?
Answer: Not calling me the moment they get that first notice.
Question: Ok, how can we avoid those costly mistakes?
Answer: Call me.
Question: What are the loopholes or “secret” strategies that one should when negotiating with the IRS?
Answer: Most people don’t know that it’s actually illegal for the IRS to collect more than you can afford to pay. They get that huge bill in the mail, realize immediately that they can’t afford to pay it and stick it in a drawer someplace, instead of calling me and dealing with the situation.
Just because you owe the IRS more than you can afford to pay, doesn’t mean you can’t work something out. There are programs like Offer in Compromise, Partial Pay Installment Agreements and Currently Not Collectible Status that were created by Congress specifically to help struggling taxpayers. Even if you can’t afford to pay anything, there’s a program for that too. We can have your account deemed Currently Not Collectible.
And in the rare circumstance that your financial situation never improves, you never have to pay. Naturally, if and when your financial position does improve, the debt becomes collectible. The IRS will monitor the situation for any change in your ability to pay. In the meantime, you get relief.
Question: In addition to what you Just told us, are there any additional strategies that America’s most debt-ridden families can use?
Answer: If you owe the IRS less than ten thousand dollars, you should probably just call them and work something out over the phone. There’s no sense paying me for something you should be able to handle yourself with no problem. In fact, if you call my office, I’ll walk you through exactly what you need to say.
For that matter, if you owe less that fifty thousand dollars, divide the amount you owe by 72 (there’s a new program that allows you to divide by 84), if you can afford to pay that, call them up and make a deal. Only if you can’t afford to pay that amount should you call my office to see what you can do about your tax problem.
If you owe the IRS more than fifty thousand dollars, you’d have to be out of your mind to try and handle it yourself. I’ve had clients who tried that before coming to me and it never turns out well. What’s worse, because they waited so long, it’s that much harder to fix what would’ve been an easy fix if they’d just called me in the first place.
Question: Why do people retain you when they can essentially represent themselves?
Answer: I think we’ve covered that. It’s about your rights and knowing how to protect them. The more you owe, the more important it becomes to retain someone who knows what your rights are and how to protect them. It’s equally important to know what programs are available. Often times the person you get on the phone at the IRS doesn’t know any more than you do. They’re just reading from the teleprompter on their computer screen.
Question: What is an Offer in Compromise?
Answer: Offer in Compromise is a program that allows individuals and small businesses who qualify to settle their tax debt for less than they owe. Basically, the IRS allows so much for expenses like your rent or mortgage, utilities, upkeep, credit card debt and the like, and the rest goes to satisfy your debt, much like a bankruptcy. It’s not for everybody. There are all kinds of slips and tricks. Assuming you qualify, you really need a trained professional to do it right. The majority of Offers in Compromise are rejected outright, mostly because of do-it-yourselfers who mistake it for a get out of jail free card. Which it simply isn’t.
Question: What are the strongest collection-related defenses you use for your clients?
Answer: I always explain to my clients early on in an engagement that I can’t stop the IRS from collecting a valid debt, but I can make them obey their own rules. I spent a lot of time early on mastering those rules. It was time well spent. When a Revenue Officer or Agent crosses the line, I go after them like nobody’s business. Nothing gets my back up like a Revenue Officer or Revenue Agent crossing the line and violating my client’s rights. I won’t have it.
Question: What’s the difference between a Revenue Officer and a Revenue Agent?
Answer: Revenue Officers are the U.S. Marshall’s of the Internal Revenue Service. They’re the guys and gals who come to collect. I often remind my clients of that great line in the movie The Fugitive when Harrison Ford tells the U.S. Marshall chasing him, played by Tommy Lee Jones “I didn’t kill my wife.” “I don’t care” was his reply. That pretty much sums up the attitude of your typical Revenue Officer. They don’t care about your problems. They’re there to collect.
Question: What are the critically important prerequisites for successfully negotiating and mediating an Offer in Compromise?
Answer: You need to know financial analysis, you need to know your rights and you need to know when the IRS is crossing the line and asking for things they have no right to ask. That takes years of experience. It’s one thing to know your rights, it’s another thing entirely to convey to an insistent Revenue Officer that you’re not going to provide them with the documents their asking for because they’re not relevant to your case. Revenue Officers routinely ask for more than they need, just to see if you’ll give them to them.
Revenue Agents handle audits of individuals or businesses. There are also individuals known and Revenue Technicians or Audit Technicians. They’re revenue agents in training.
Question: Does the IRS consider expenses for pets as a “necessary and allowable “expense?
Question: How can I get more valuable ideas and tax-saving information?
Answer: Call me.