Why You Might Just Need a Tax Professional

In many cases, a professional can resolve a tax debt issue much more effectively that you could do on your own.

There are plenty of things you can do on your own. Depending on your experience, though, tax resolution probably isn't one of them. Receiving a notice from the Internal Revenue Service can be terrifying enough; failing to properly address it, though, can be a horror show unto itself.

Now, you might be thinking that dealing with a tax issue is as simple as sending a reply to your notice and, in some cases, it is. You might also wonder why you would consider hiring someone to do something that you could do on your own. When you think about it, though, how much do you really know about tax resolution? Before you decide how proficient you are, consider the grim realities of handling a tax problem:

Time Flies With the IRS

First and foremost, any notice you receive from the IRS requires an immediate response. In many cases, you'll only have around thirty days to send a reply. And you might not agree with what the IRS is claiming. Any point that you contest must be supported by valid documentation. If they're alerting you to unreported income that you know is incorrect, for instance, you'll have to jump through a few hoops to properly plead your case. You may need to contact the employer who reported the income, and his or her level of urgency likely won't be as high as yours. And, chances are, you've got daily responsibilities to juggle while you're gathering your documentation. Not ideal when you've got a narrow window of time to respond. If the clock runs out, you might be inclined to disregard that notice.

Turning Your Back

You can opt to do nothing, hoping that the IRS will forget about you. They won't. If you don't respond to your notice, the IRS will assume that the information they have is correct. At this point, you'll begin receiving letters informing you of your assessed balance, plus penalties and interest (more on this in a moment). The longer you wait to deal with your liability, the greater the chances that you'll never get around to it. After a while, the IRS will lose patience and become more proactive in collecting the debt; wage garnishments and bank levies are the end result of the wayward taxpayer's neglectful follies.

Your Debt, Expanded

A notice of assessment will include an itemized list of charges for any penalties and interest, dated back to the original day you owed the balance. So, if you did have unreported income that you owed taxes on by April 15, 2015, and the balance is assessed in October of the same year, you already have six months' worth of penalties and interest. And additional fees are tacked on for every month that passes thereafter. What you owe after a year or two can make your original balance pale by comparison.

Negotiating in a Vacuum

Assuming that you have both the time and the inclination to deal with the IRS up front, you can certainly avoid some of their more aggressive collection methods. You may even be able to establish an installment agreement, allowing your tax debt to be paid over an extended period. But will the terms be to your liking? The IRS may request an overview of your finances to determine what you're going to pay each month. However, in some cases, you don't have to comply with their request in order to obtain a repayment plan. Knowing these subtly important details can mean the difference between a monthly payment that is comfortable and one that puts your wallet in a vice.

Know When to Ask a Professional

No matter how savvy you may be, it never hurts to get a second opinion. A licensed tax professional can provide you with a consultation, and this should be at no cost to you. He or she will lay out a proposed resolution, based on the specifics of your situation. Then you may make an informed decision on how to proceed. Exercising caution when it comes to your taxes is always preferable to flying by the seat of your pants.

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Talk to a Tax attorney.

How It Works

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  3. Choose attorneys to contact you