Dealing with tax matters can feel overwhelming, especially if you receive a letter from the Internal Revenue Service (IRS). The IRS is the government agency responsible for collecting taxes and enforcing tax laws in the United States. Their jobs involve making sure everyone pays what they owe properly.
Click here to learn more about who the Internal Revenue Service is.
However, the tax rules are complex, with many technical details and deadlines. If you ever find yourself in a situation where you disagree with the IRS about how much you may owe or have other tax-related issues, that’s where hiring a tax attorney can help.
Tax attorneys are legal professionals who specialize in tax law. They understand how the Internal Revenue Service works and know the ins and outs of the tax code. When taxpayers work with an attorney, they benefit from guidance on the best options to resolve any issues with the Internal Revenue Service, such as negotiating directly with the Internal Revenue Service or taking your case to tax court if needed.
Raleigh, North Carolina, has many experienced tax attorneys with whom people can consult. This article will explain the common circumstances where a Raleigh attorney is allowed to interact directly with and potentially negotiate on your behalf with the Internal Revenue Service in order to resolve tax issues without full penalties or legal action. Knowing when these opportunities are available allows taxpayers and their attorneys to handle IRS contracts in the most advantageous way.
After Receiving a Notice
When you receive a letter from the Internal Revenue Service, that’s a good time for a tax lawyer to contact them. The Internal Revenue Service sends letters if they think you may owe more taxes. A common reason is if an audit finds you didn’t report all your income.
These letters usually give you time to respond. Calling a tax attorney right away lets them look over your tax situation closely. They can ask the Internal Revenue Service to check it again if mistakes were made or if they need more information. Lawyers will send extra documents and details for them to review. This often helps the Internal Revenue Service agree that no extra taxes are actually due after looking a second time.
Even if some taxes are still owed, an early payment can sometimes lower the amount. It also prevents bigger penalties and interest from building up the longer it goes unpaid. So, contacting a lawyer helps a lot when you first get that Internal Revenue Service letter. They can work to fix the issue quickly before it becomes a bigger problem.
During an Audit or Examination
One of the IRS’s main ways of ensuring compliance is by conducting audits of taxpayers’ returns. When an audit is underway, it’s another prime chance for a Raleigh attorney to interact directly with the Internal Revenue Service.
During the audit process, the attorney can assist the client by providing further documentation to the Internal Revenue Service agent handling the exam. This extra information, such as receipts, expense records, or transaction details, helps support the tax items in question. It aims to demonstrate that no deficiency exists and resolve discrepancies.
Audits sometimes uncover simple mistakes or misunderstandings that can easily be corrected with an explanation from counsel. The IRS agent is also more open to feedback and answers during this phase compared to later compliance actions.
Having an advocate engaged actively prepares taxpayers, gives insight into IRS processes, and potentially leads to closing agreements where no further action is required from either party. Even if a complete agreement isn’t reached, a lawyer ensures the exam proceeds fairly and preserves taxpayers’ appeal options as needed. Overall, representation at this stage helps more audits end successfully with no tax changes.
See https://asq.org/quality-resources/auditing for more details on auditing.
When Facing Enforcement Action
If a tax dispute persists after initial contacts, audits, and assessments, the Internal Revenue Service has the authority to take extra steps to ensure payment. Some common enforcement actions attorneys can negotiate through include tax liens and wage/bank levies.
A tax lien publicly records the government’s right to your assets, like real estate, to satisfy debt, which harms credit. Wage levies can have up to 25% of each paycheck diverted until balances settle. Bank levies drain savings. These actions trigger additional fees, so taxpayers want a resolution.
Counsel can request penalty waivers and installment payment plans tailored to clients’ means with IRS Collections divisions. Other options, like Offers in Compromise, let proven unable-to-pay taxpayers satisfy obligations at reduced amounts that the Internal Revenue Service determines they realistically could pay.
Where negotiations go unsuccessfully, attorneys still offer appeal options. However, working cooperatively with the Internal Revenue Service often yields agreements that benefit all parties more equitably than enforcement alone. Even at these pressured stages, attorneys improve their chances for satisfactory debt remedies without further disruptions.
After Filing a Tax Court Petition
Sometimes, talking to the IRS doesn’t work out the first time. Then, taxpayers can take their case to the U.S. Tax Court before paying what they’re told to pay. To do this, you file a petition within 90 days of getting certain IRS letters.
When you petition, you hit “pause” on paying until your case is decided in court. But it also gives the IRS and you more time to try settling out of court. An experienced Raleigh NC tax attorney will meet with the IRS lawyers assigned to your case. They’ll go over all the paperwork together to see if they can now agree.
Most times, settling is better than going through a long trial. Taxpayers want to avoid paying upfront and then having to sue for their money back. Lawyers keep trying to find a deal right up until the possible trial date. Even at this late stage, attorneys can still stop a case from going all the way to court judgment. Their experience helps taxpayers save time and stress whenever possible.
Bottom Line
The IRS provides several opportunities at different points for taxpayers and their Raleigh attorneys to engage in negotiations to resolve disputes without full penalty enforcement or litigation. While not every issue can be settled, experienced counsel understands these negotiation options and utilizes them strategically.
Whether contacting the IRS initially upon a notice, actively participating in an audit, requesting penalty relief from collections actions, or mediating ahead of the court – an attorney’s guidance helps taxpayers efficiently navigate the settlement process each stage allows. Their tax expertise provides accurate explanations of positions to the IRS while pursuing mutually agreeable solutions.
While the code remains complex, taxpayers should feel empowered knowing their rights to representation and resolution discussions with the Internal Revenue Service at key decision points along the way. Obtaining counsel’s input early helps take full advantage of flexible options before disputes potentially escalate. In many instances, with good faith from both sides, compromise avoids overburdening the court system and provides fair outcomes for all.