The Breakdown of an IRS Audit - By Phone or Mail

In January of this year, the IRS reported conducting over 150,000 completed audits. Seventy five percent of these audits where conducted by phone or mail. Neither tax payer nor the professional representing the individual ever had the IRS physically enter their home or place of business.

IRS Audit - By phone or mail

These types of audits use batch-processing, this means the audit uses fully automated initiation, processing, and closing tactics. Referred to as the Automated Correspondence Exam system, or ACE, the audit is conducted with little or no involvement of a physical Tax Examiner. All corr exam (correspondence-based exam) cases, also referred to as correspondence exams, are in fact conducted virtually. 

This may seem less threatening to the tax payer once notice of an ACE examination is received, but do not be fooled by the lack of human presence during these types of audits. These audits omit the face-to-face contact sometimes needed to turn the tables on your tax difficulties. Moreover, because your individual case may be selected to participate in an ACE type of audit, no tax representative from the IRS is assigned to your case. This means when correspondence is needed, or you simply have a question about your audit, you have no point of contact at all with a Tax Examiner. This inevitably leads to your concerns being shuffled around the IRS office from one rep to another.

Because there is no tax representative assigned to your case, corr exam are selected automatically, the audit notice is mailed automatically, the response time frames are tracked automatically, and Notice of Deficiency is mailed automatically; you hardly have a decent chance of getting audited fairly and without penalty from the IRS. You the tax payer is unable to insert themselves properly and exactly into the ACE audit process, there is no doubt the audit will eventually end in the IRS's favor.

The IRS Restructuring and Reform Act signed into law in 1998 states the IRS is to include in all manually -generated correspondence the name, telephone number, and a unique identification number of the IRS employee who is assigned to your individual case. The ACE system in essence violates the Restructuring Act since during this type of audit you are never assigned a tax rep or Tax Examiner.

When dealing with the IRS Problems, you need all the information available to you. It is important to understand your rights and contact a tax professional as soon as trouble arrives. Optima Tax Relief can help you understand some of the things you may face during your audit as well as help you find the best tax attorney for your individual case.

How to Choose a Tax Attorney Appropriate for Your Needs

Tax attorneys are well versed with all the minutiae that accompanies the IRS tax code. Knowing how to choose a tax attorney for your case depends on what area of the tax code you are needing help with. These areas include: trusts; estate planning; business taxes; and, tax disputes. These attorneys are tax professionals that can provide you with the experience of the law and of the courts that can help leverage your case in favor of your outcome.

Why a Tax Attorney

There are many reasons to hire Expert tax attorney.

If you are looking to set up a trust account so that money is safeguarded from unregulated expenses, a tax attorney can provide the details and documents needed to get it started. These trusts must follow certain tax regulations and a tax attorney will know how to follow them.

For businesses, tax attorneys know how to register your business for tax compliance. This includes knowing which taxes need to be paid and when. Tax attorneys can also help businesses set up for international accounts. This is useful when needing to do business in a foreign country and understanding all taxes necessary to operate legally.

Tax attorneys can provide clients with the information necessary to stay within the law. Finding a tax attorney with a well fought history can be most beneficial for winning your case. If you are being sued by the IRS or need to file suit against the IRS, a tax attorney can provide you the services necessary to argue your case. This is especially important because hiring an attorney in tax situations extends the attorney-client privilege.

Tax Attorneys are not Accountants

A person should also be aware that tax attorneys are not accountants. They may be able to help calculate the taxes needed to pay, but they will not file them on your behalf. You would still be responsible for sending your tax forms into the IRS.

Finding the Right Tax Attorney

Finding the right tax attorney for your case begins with researching what you need. For tax disputes, creating businesses, or other areas, it is best to find an attorney that has specialized in these tax issues for many years. Finding their BBB rating, years of being in business, and testimonials from previous clients are great ways to begin researching.

Understanding every fee is an important process in finding the right attorney. Looking for an attorney that has estimated fees within your budget is important. Also, you should avoid any calls or supposed firms that are offering low fees upfront. These are advertising businesses trying to sell as much as they can. They will quote a low estimate but then start adding on additional charges further on.

Tax attorneys specialize in various areas of the tax code. For businesses, tax disputes, trusts, and other tax entities, knowing which area you are needing help with is important. Finding the right tax attorney begins with shopping around and finding one that has the experience and testimonies that demonstrate great service. It is important to avoid falling for businesses that represent themselves as tax firms with low fees. They will tack on additional fees and provide a subpar service.

Professional tax attorney

If You Have

Received Notice of

an IRS Audit -

Should You Hire

A Lawyer?

If you are facing an IRS audit, the time may have come to hire a tax attorney. The benefits of hiring a tax lawyer far outweigh the possible cost to retain one. When the IRS comes knocking, a tax attorney can help you avoid the hefty penalties and fines that are associated with negative determinations resulting from an audit.

 

If you have received notice of an IRS audit - Should you hire a lawyer? Think of the benefits:

 

A Professional tax attorney can make a clear assessment of your financial documents. This preliminary action will give you and your lawyer an idea of what the IRS may be looking for in the audit.

 

A tax lawyer can organize your records so the preparation of this daunting task will be well underway before the IRS begins the audit.

 

A tax attorney is your advocate and will protect and defend you, minimizing any repercussions that follow the audit.

 

The tax attorney knows your rights and it is his or her duty to make sure your rights are respected and the law is enforced fairly during and after the audit.

 

Hiring a tax attorney can bring you peace of mind during this incredibly stressful time. When your attorney reviews your records, he or she will determine which documents will be needed and which to omit during the audit. Often times when we are faced with an audit, we disclose more information than required. While in communication with the IRS, your tax attorney will know what the IRS requires for the audit and present only what you are legally bound to present. 

 

Another advantage of hiring a tax attorney is that you may never actually have to deal with the IRS personally. Audits sometimes take quite a bit of time; phone calls, meetings, and information gathering can be extremely time consuming causing you to miss work, time with family, and time away from your business if you are self-employed. 

 

After the IRS audit, your lawyer can aid you when your case is determined. If the IRS finds you at fault, your lawyer can negotiate on your behalf, helping to reduce your penalties and fines. If you are found guilty of a crime such as tax fraud after the audit, your lawyer can defend your case in court. Remember,your relationship with your lawyer is a confidential one; this is not the case with a CPA or accountant. Also, if you disagree with the IRS audit results, your lawyer can appeal the decision.

 

You can be at ease knowing your lawyer will apply the best practices in order to help you with your audit. It is important to consult with a tax attorney as soon as you receive notice of an IRS audit. Let the folks at Optima help you find the right tax attorney. Besides audit help, tax attorneys can also aid you with estate planning, business taxes, payroll taxes, and day to day business operations.

 

Devin Finley is a freelance writer and tax expert. Devin writes on a multitude of financial and legal topics. He enjoys collaborating and strategizing with other professionals to ensure tax & debt clients receive competent and beneficial representation.

For more information Visit http://optimataxrelief.com/

tax debt

Tax Debt Relief:

What Is An Offer

in Compromise?

Along with death, payment of taxes is often quoted as one of the immutable facts of life. Of course, most people's feelings are ambivalent about paying taxes. Everyone benefits from the services provided by tax payers' money, but nobody relishes the prospect of parting with hard earned income. Even worse still are the situations in which it simply isn't possible to pay the full amount expected by the government.What can be done when an "unstoppable" lack of financial resources comes up against an "immovable" IRS tax amount?

 

Actually, there is a little-known legal prerogative open to qualifying tax payers who find themselves in the situation of being unable to pay a large tax debt. Known as an Offer in Compromise, the government concedes to allowing, and hopefully accepting, an offer of a portion of the tax liability owed. In fact, the IRS has been known to accept as little as one percent of the total amount originally owed. It is not a magic solution, however. There are a number of facts and processes to keep in mind that can help to make this a viable and successful option.

 

Requirements                                  

Everyone would, of course, love to pay only a fraction of their taxes. However, before jumping into the process, it's important to review just who qualifies. The IRS allows essentially one of two different qualifying situations.

 

• The IRS has reason to believe that it cannot, now or in the foreseeable future, collect the total amount owed. 

• Truly exceptional circumstances prevail, making it an economic hardship, unfair, or an inequality to pay the tax bill in full.

 

The Process

For those who find themselves qualifying for an Offer in Compromise, a formal process now begins. Unfortunately, it's not a process that is free. $150 must accompany a completed IRS Form 656, Offer in Compromise, along with Form 433-A, the Collection Information Statement.

 

During the processing of the application, which could take over a year, the IRS will likely require large amounts of additional information, such as pay stubs, vehicle registrations, bank records, and countless other bits of financial information.

 

Those who are approved, which can be less than %20 of the total requests received for a given year, are then expected to fulfill a few requirements. If these requirements are not met, the government can revoke the Offer in Compromise.

 

• The amount offered in the Offer in Compromise must, of course, be paid as offered. 

• Filing tax returns and paying any amounts owed is particularly important over the next five years. 

• The IRS gets to keep any refunds, payments, or credits from the time prior to submitting the Offer in Compromise through the time of processing.

 

Things to Consider

There are indeed a number of benefits to an Offer in Compromise, particularly since it is usually a last resort. However, there are also other factors to take into consideration before making any final decisions.

 

• The $150 fee is not refundable. If an applicant is denied or an approved request is later revoked, the money stays with the IRS. 

• With all of the detailed information supplied to the IRS during the process, the disclosure of assets will enable the government to more easily increase the effectiveness of any debt collection efforts against the applicant. 

• It’s vital that anyone requesting an Offer in Compromise remember that interest continues to accumulate during the entire process. If a deal is not made, the amount owed could end up being more than ever due to the interest.

 

Obtaining an Offer in Compromise from the IRS for the payment of a large tax obligation can be a time consuming challenge. However, for those who have exhausted all other avenues and options, it can be the opportunity to pay a debt owed to the government, and, in a way, get a fresh start in the ongoing relationship with the IRS. 

 

Devin Finley is a freelance writer and tax expert. Devin writes on a multitude of financial and legal topics. He enjoys collaborating and strategizing with other professionals to ensure tax & debt clients receive competent and beneficial representation.

For more information Visit http://optimataxrelief.com/