A tax attorney can negotiate with the IRS on your behalf once you authorize them to do so with IRS Form 2848 (Power of Attorney). Their main role is to stop collections, set up payments, or get settlements if applicable, but they can also represent you in all other IRS and state tax matters, including the U.S. Tax Court.
If you find yourself going up against the IRS, having a tax attorney can help you navigate your tax issues and challenges. Keep reading to learn more about what exactly a tax attorney does, when you should hire one, and how they can help you negotiate with the IRS. Or reach out to our IRS negotiation lawyer today.
Key takeaways
- Tax attorneys help you negotiate the best result from the IRS.
- They’ll stop pending or in-progress collections, such as garnishments or levies.
- They help you deal with tax debt, apply for payments, or secure settlements if possible.
- They provide peace of mind and guidance when you’re dealing with complex tax laws.
What Is a Tax Attorney and What Do They Do?
A tax attorney is a tax professional who focuses most of their time on interpreting and applying tax laws. They’re highly skilled and have a solid understanding of federal and state tax policies and regulations, and how these laws affect taxpayers.
Tax attorneys have graduated from law school, obtained a license to practice law, and passed their respective state bar exam. Equipped with these qualifications, a tax attorney is prepared to advise you of the best course of action and represent you in front of the IRS.
Types of Situations Where a Tax Attorney Can Help
Tax lawyers can assist in several ways, including situations where you need to:
- Deal with legal situations that could result in civil and/or criminal liability.
- Resolve a tax debt.
- Negotiate a tax settlement with the IRS.
- File missing tax returns.
- Amend one or more tax returns.
- Deal with an audit, including appealing the result of an audit.
- Appeal a collection action, such as a lien or levy.
- Remove a lien or levy on your property.
- Challenge a tax assessment.
Overall, these tax professionals can help you navigate complicated tax problems and act as your representative so that you don’t have to deal with the IRS on your own.
Representation When You’re Facing Criminal or Civil Legal Consequences
The number one situation that warrants using a tax attorney is when you could face legal consequences due to your current tax situation. They can provide assistance when your tax issue involves a risk of tax evasion or criminal fraud charges.
Guidance When You Need Financial Relief from Tax Debt
When you owe the IRS a significant amount of money, you should contact a tax attorney to get informed about your options before the IRS starts collection actions, such as wage garnishment or bank levies.
Tax Advice
You can consult with a tax attorney at any time about any tax questions you have, and you can use their advice to make informed decisions about your future. Even when you have questions you could research yourself, having a tax attorney to “double-check” your work can provide invaluable peace of mind.
Can Attorneys Negotiate With the IRS?
Yes, your tax attorney can communicate and negotiate with the IRS on your behalf.
The IRS is well-versed in the law, but the average taxpayer isn’t. Because of this, the IRS must allow taxpayers to seek legal counsel upon request.
Therefore, per Internal Revenue Code Section 7521(b)(2), the IRS must stop talking to taxpayers if they say they would prefer to consult with a tax attorney, CPA, or enrolled agent regarding their tax situation. This law is intended to protect the taxpayer.
What Are Some Tax Attorney Strategies That Can Help During IRS Negotiations?
A tax attorney will provide a host of benefits during tax negotiations with the IRS, especially concerning a substantial unpaid tax balance. Some of these strategies include:
- Assessing your financial situation: A tax attorney can analyze your finances to determine your eligibility for certain programs, like an offer in compromise or Currently Not Collectible status, and help you decide if they’re viable options for your situation.
- Gathering important information: A lot of negotiating with the IRS requires you to provide information and documents to the IRS to support your claims. A tax attorney can help you with this process.
- Presenting the best offers possible to the IRS: A tax lawyer knows the best way to present settlement offers and requests for program acceptance to increase your chances of success.
- Identifying legal arguments to help your case: If there’s a specific regulation or court case that supports your position, your tax attorney will leverage that to improve negotiations with the IRS.
- Negotiating tactics: A tax attorney will have the experience to know what to say, how to say it, and when to say it to the IRS to achieve a more favorable outcome for your tax problem.
Do Tax Attorneys Really Help?
Yes, their experience is invaluable, especially if you’re dealing with high tax debts, trying to get a settlement, or navigating complex business, estate, or trust taxes.
- What improves – the level of guidance you receive and your ability to get the best result possible for your situation.
- When it’s not necessary – if you know how to resolve the issue and are comfortable doing so on your own, you may not need an attorney.
The real answer comes down to your personal preference, such as the importance of peace of mind and if time is of the essence.
Can an Attorney Lower Your Taxes Owed?
Possibly, although there’s no guarantee. An attorney will be able to help you determine if you’re likely to be eligible for an IRS tax debt forgiveness program, such as:
- Offer in Compromise: This allows you to settle your tax debt for less than what you owe.
- Penalty Abatement: In some cases, the IRS may automatically waive penalties, but if not, you’ll need to request penalty abatement.
- Currently Non-Collectible Status: Acceptance into this program can pause the IRS’ collection efforts against you, but only taxpayers who meet stringent financial requirements are eligible.
- Partial Payment Installment Agreement: This is a type of pay-over-time settlement option that offers the possibility of manageable monthly payments and the possibility of paying off your tax debt for less than the full amount.
- Amended tax returns: If a prior tax return contained incorrect information that resulted in you paying more taxes (or getting a smaller benefit, like a tax credit or refund), an attorney can help you amend.
A tax attorney is well-positioned to leverage the law to your advantage where possible. In particular, they can help you understand if you should apply for an offer in compromise.
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Can an Attorney Help During the Investigation Stage When Negotiating with the IRS?
Of course. Dealing with an IRS’s request for documents and other financial information can be the most frustrating and scary part of any interaction with the IRS. It starts when the IRS sends you a letter containing a list of documents and financial information demands.
A tax attorney can really shine here because they can help you figure out where to get this information, and if you don’t have it, they can craft the appropriate response to the IRS. Then, once the information is obtained, they can use it to support your position during tax negotiations.
Determining if You Need to Hire an Attorney
Whether you need to hire an attorney depends on your tax issues, financial situation, and personal preferences. For example, you might need to set up a payment plan, which you could do yourself.
However, you’re afraid that you’ll miss something important and want the reassurance a tax attorney can provide. Or maybe you can handle your tax matter yourself, but it would be time-intensive to do so, and it’s actually more affordable for you to hire someone else to handle things for you. Then there’s the nature of the tax problem and whether a tax attorney is best suited to help you deal with it.
Tax Attorneys vs. CPAs vs. Enrolled Agents
There are several benefits to working with a tax attorney, but sometimes your tax situation might require the skills of a different type of tax professional.
For instance, certified public accountants (CPAs) are ideal if you need help crunching numbers and have to make a decision based on financial information. Enrolled agents (EA) are individuals who are authorized to represent taxpayers in front of the IRS, and they can be an effective option if they have the right experience, as they may charge less than an attorney.
How to Find a Tax Attorney
Before you hire the first lawyer that pops up when you Google “tax attorney near me,” there are a few things you should do.
- Learn about the attorney’s experience with tax representation and their past case results.
- Read what past clients say about the lawyer or law firm in reviews and testimonials.
- Ask family, friends, or colleagues for recommendations.
- Schedule a consultation.
- Pay attention to the x-factor, such as how they make you feel, their personality, and their working style.
Do Tax Attorneys Offer Free Consultations?
Some tax attorneys offer free consultations, some don’t, and many offer a choice between a free consultation with a non-attorney or a paid consultation with an attorney. There are advantages and disadvantages to free consultations.
- Free consultation – short conversation about your issue to learn if they can help.
- Paid consultation with an attorney – in-depth conversation with an attorney about the details and options in your situation.
At Wiggam Law, we initially offer a free consultation with our Client Services Coordinator to ensure we can serve your needs before you pay for a consultation with one of our attorneys.
How Much Will it Cost to Hire a Tax Attorney?
The answer depends on the specific firm you work with and the complexity of your case. Most firms use one of the following fee structures:
- Hourly – pay for the time needed to resolve your case.
- Flat fee – pay a flat fee based on the type of tax problem.
Often, when firms charge hourly, they take an upfront retainer. Then, they bill you hourly and take the funds from your retainer. You get a refund if anything’s left at the end of your case.
Are You Looking for Tax Resolution Attorneys You Can Rely on?
Are you currently looking for a tax resolution firm to assist with your tax questions and concerns? If so, our team of tax professionals would love to hear from you to see how we can help. We know how stressful and complex tax issues can be, but you can rely on our legal expertise to help you more easily navigate your tax situation and achieve the best resolution possible. Schedule a consultation with our team or call us at (404)609-1300 now to get started on your tax resolution journey.
FAQs on Tax Attorney Negotiations
What Does IRS Negotiation Include?
When an attorney negotiates with the IRS, they receive authorization from you. Then, they gather documents, outline your options, let you choose an option, and propose a resolution to the IRS. Finally, they follow up with the relief application and appeal if needed.
How Does a Power of Attorney Work?
Form 2848 gives the individual named in the form (your tax attorney) the legal authority to receive your tax information for the tax years on your form and to represent you in front of the IRS. Without this important document on file, your tax attorney can’t legally talk to the IRS about your tax situation.
Can a Tax Lawyer Prevent a Tax Levy?
It depends on the situation, but a tax attorney can often help you take steps to avoid the IRS taking your property with a tax levy, such as seizing a house or garnishing your wages. A tax attorney can help you set up payments to avoid a levy, respond to levy notices, or file an appeal.
Can a Tax Attorney Help With a Tax Audit?
Absolutely. Dealing with a tax audit is one of the most critical times to have a tax attorney represent you. This is because a tax attorney can help you understand how the audit process works and what’s required of you. For example, they can help you understand the scope of an auditor’s document request and help you avoid wasting time searching for documents you don’t need or, even more importantly, documents that might incriminate you.
How Would a Tax Lawyer Help When Requesting a Payment Plan?
A tax attorney can help you identify the best IRS installment agreement for your situation and apply for it. They can also help you deal with unfiled tax returns and identify settlement options if relevant.
