If you are in trouble with the Internal Revenue Service (IRS) owing to penalties, liens, levies, wage garnishments, or any other matter, feeling intimated is normal. However, it is important to remember that a number of people deal with similar problems each year, and that your problem may well have a simple solution.
Why Might the IRS Send You a Notice or Letter?
The IRS may get in touch with you for different reasons. These include:
• You need to pay outstanding taxes
• The IRS has modified your return
• You are due to receive a smaller or larger refund
• The IRS has questions about your return
• It needs to verify your identity
• It needs to inform you about a delay in processing your return
You need to respond to any such notice from the IRS in a timely manner for two reasons. The first is to preserve your right to appeal in case you disagree. The second is to avoid additional charges in the form of penalties and interest.
Do You Need a Tax Attorney?
Not every notice or letter you receive from the IRS requires the attention of a tax attorney. However, there are instances when consulting with an experienced attorney might be in your best interest.
If the IRS has initiated criminal investigation against you, if you want your case to be represented independently in court, or if you wish to file a lawsuit against the IRS, consider seeking legal assistance soon. This also holds true if you think you might have – knowingly or unknowingly – committed tax fraud.
Estates are legally obliged to file federal taxes. As of 2021, if the total value of your estate exceeds $11.7 million at the time of your death, it becomes taxable. In case the value of your estate exceeds this threshold, your heirs will need to pay up to 40% of the balance over the limit as estate tax. Your estate might also be subject to a state estate tax depending on the state in which you die. A tax attorney can devise suitable strategies to reduce your estate’s tax liabilities in a completely legitimate manner.
Setting up a new business comes with different tax implications. For example, might you be better off registering as a sole proprietor or a company? A tax attorney can guide you in the tax treatment and structuring of your business. Tax attorneys can also be of assistance if you plan to take your business overseas.
How Can Tax Attorneys Be of Help?
A tax attorney can provide assistance not just after, but before you have a problem with the IRS as well. What you may expect includes:
• In-depth research of your case
• Dealing with the IRS on your behalf
• Negotiating for a tax settlement
• Representing you in court
Areas of Expertise
Tax attorneys are known to handle a variety of cases related to federal and state tax codes. They tend to specialize in one or more of these areas.
• Audit representation
• Criminal defense
• Installment agreements
• Offers in compromise
• Outstanding tax returns
• Penalty relief
• Release of tax levy or tax lien
• Removal of wage garnishment
Should I Hire a CPA Instead?
If you’re unsure about whether to use the services of a tax attorney or a Certified Public Accountant (CPA), you need to take into account the problem at hand. If your requirement limits to handling personal or business taxes with the aim of minimizing tax liability, hiring a CPA might be adequate. However, if you have been summoned by the IRS or have received tax collection notices, seeking help from a tax attorney might be in your best interest. Hiring a CPA in such a scenario might only land you in deeper trouble.
If you are at the receiving end of an IRS audit, inquiry, or enforcement proceeding, consider seeking legal help as quickly as possible. Bear in mind that while several people face harsh consequences, the legal relief you seek might be closer than you imagine. All you need to do is consult with a knowledgeable and experienced tax attorney.