April 16, 2024

Every Taxpayer Has the Right to Retain Representation When Working With the IRS

According to the taxpayer bill of rights, set up by the IRS, every taxpayer has the right to request and retain representation. What does this mean? When you’re dealing with a tax audit, a penalty assessment, or anything else from the IRS, you’re entitled to have assistance.

You can hire a professional tax advisor, or, if you’re on a budget, request help from a Low-Income Taxpayer Clinic. Essentially, you don’t have to go up against the IRS on your own. You can (and should) retain the services of a professional who can assist you every step of the way.

Every Taxpayer Has the Right to IRS Representation

Why Would You Retain Representation?

There are many reasons why the IRS could reach out to you about your prior tax returns. In order to ensure that you get fair treatment, as well as have an expert communicate with them for you, you need to retain representation.

Here are some examples of situations where representation is recommended:

  • Tax Adjustment Notice – If the IRS has gone over your tax return and your financial information, and then decided that you did not pay enough in taxes for that particular year, then they’ll send you a tax adjustment notice. This notice will include information about how they reached that decision, as well as how much they now believe that you owe. Retaining representation will help you dispute their findings and assist you through the additional steps in the process.
  • Examination or Audit Notice – If you’re going to be audited or put through a tax examination, the IRS will send you a notice. There are several different types of audits and exams, including those where you need to send them the information that they’re requesting through the mail, as well as those where you meet the IRS in their local offices at a prearranged time with the records that they want. In addition, there’s the classic “IRS agent at your doorstep” type of audit. No matter which one you’re selected for, you have the right to ask a representative to help you gather your records and communicate with the IRS for you.
  • Federal Tax Lien Notice – A federal tax lien is one step away from having your items seized by the IRS for non-payment of taxes. They send a number of noticed up until this point, and if you haven’t responded or attempted to pay them (or set up a payment plan that fell through), the IRS will seize your bank account, business buildings, home, vehicles, licenses, and more, depending on the circumstances. Remember that receiving this notice does not mean that it’s too late to speak with the IRS regarding the circumstances. However, you don’t have to speak with them yourself, as your representative, who has plenty of experience with similar situations, can do so for you.
  • Missing Or Late Tax Return Notice – Whether you forgot to send in your tax return due to oversight, or somehow it went missing in between your office and the IRS, you’ll need to submit that information. When you receive a notice from the IRS that your tax return was not received, it’s usually accompanied by an amount that they believe you owe them, based on the information that they obtained from your previous tax records. You have the right to obtain representation and work with the IRS to submit an amended return with the correct information. In addition, if your tax return was sent in late, a tax professional can work with the IRS to possibly alleviate some of the penalties and fees that you’re facing.
  • Penalty Assessment Notice – Speaking of late tax returns, a penalty assessment notice is often sent out when your tax return is submitted late. Unless you received an extension and met that deadline, the IRS considers your tax return to be late starting the day after it was due. The penalties and fees that are charged go on top of the taxes that you owe them, making your bill even higher. If you received a penalty assessment notice, it’s time to speak with a tax professional and retain representation in order to have someone on your side as you communicate with the IRS regarding this situation.
  • Federal Tax Levy Notice – One step beyond a tax lien, a levy means that the IRS is really intending to seize your property due to back taxes owed. They will come and take your property, just as they threatened to when they sent out the tax lien notice. As with that notice, receiving a levy notice isn’t necessarily the end of the situation. By working with a representative, you may still be able to keep your property. Your tax professional will find a way to work with the IRS in order to reach a mutually agreed upon arrangement.

These are some of the main reasons why you’ll need to officially retain representation when working with the IRS. There are some additional ones below, as well as others that aren’t covered here.

Other Reasons to Ask for Representation

On top of everything listed above, there are several other reasons why you might want representation when working with the IRS. Most of them as slightly simpler than the complicated reasons described in the previous category. They include:

  • Setting Up a Payment Plan – The IRS prefers to work with you and allow you to set up a payment plan should you owe them more money that you can afford to pay up front. Doing so prevents them from having to send out repeated notices and threaten you with liens and levies. If you feel unsure about working with them, retain a representative to help you get a mutually agreed upon payment plan into place.
  • Questions About Tax Returns – If you have any questions about your tax return, you are entitled to an answer from the IRS. They may be tough to reach, due to the sheer amount of people calling in juxtaposed with too few IRS agents to answer those calls. Thankfully, a tax professional usually has additional access to the IRS, and they might be able to answer your question on their own. This is just one additional reason why retaining a representative is helpful.
  • Questions About Specific Investment Categories – The law regarding certain investments, like cryptocurrency, have changed quite a bit, making it tricky to ensure that you’re reporting them properly on your tax return. Reaching the IRS can be tough, since there are only so many agents available to answer the phone. Working with a representative who is also a tax professional can alleviate some of the headaches and get you the answers that you’ve been looking for.

How to Choose Representation

Of course, you have the right to choose who will represent you when you’re working with the IRS. Making this decision requires some time, as you’ll need to find someone who has:

  • Experience Working with the IRS – Tax professionals who have worked with the IRS in the past and have a long track record of success are the best people to choose to represent you. Not only do they know the many ways to contact the IRS, but they also understand how to get both of you on the same page.
  • Knowledge of the U.S. Tax Codes – It’s incredibly crucial that the person or firm that you choose to represent you has a deep knowledge of the U.S. tax codes. These often change from year to year, so keeping up to date with them is very important. A tax professional usually spends quite a bit of time memorizing parts of the tax code in order to be able to answer your questions fairly quickly. They will rarely steer you in the wrong direction.
  • The Time to Speak with You – You’ll need to find a representative who has the time to discuss your situation with you. They’ll need you to provide some information and will request which documents are crucial, but more importantly, they’ll be there to listen to the issues that you’ve had, answer your questions, and assist you by helping you work with the IRS.
  • The Ability to Help You Successfully – The one thing that you want most from this situation with the IRS is a conclusion that makes both you and the tax agents happy. A good tax professional and representative will be able to help you reach a decision that solves the problem in a respectful manner.

Contact Us Today

If you have received a notice from the IRS and are considering hiring someone to represent you when working with them, then you need the help of a tax professional. Reach out to the tax advisors at the Enterprise Consultants Group. We can answer your questions, discuss your rights, and provide actionable options. Please call us at (800) 575-9284 or click HERE to schedule a free and confidential consultation to see how we can help you.