Tax Law

Do You Need a

Tax Attorney?

You got a letter from the IRS. Do you need a lawyer? When you have IRS tax problems, it is very important to handle the situation very carefully. IRS tax matters are very critical and entail many sensitive issues. Even the slightest mistake in the process can cost you very dearly in the form of loss of money, time, can get you frustrated and may land you in jail. The tax laws and the legalities involved in the process of settlement of your IRS taxes can be very complex and you may not understand all of the opportunities, options, and nuances.

If you had received such a letter, there would be many questions rushing through your mind such as:

Should I hire a tax attorney if I am facing an IRS audit?
Is hiring an attorney expensive?
When should I hire a tax attorney to represent me in my IRS tax debt dispute?
Can I really settle my tax debt with the IRS for less?
Should I lawyer up against the IRS or not ? …………and many, many more………….

When you want to save yourself and your business from IRS penalties, interest and possible criminal actions (including jail terms), it is best to hire an expert in tax representation, who will be able to handle your situation better.

Mr. Hagendorf as both a tax lawyer and CPA has the expertise to devise a specific plan of action for your case and implement it.

He is experienced to handle the technicalities involved in the tax resolution and settlement process.

Reasons to Hire a Tax Attorney

Reason One – Exemption from testifying

If you are in trouble with the IRS only a tax attorney can give you attorney-client privilege. Why is the attorney-client privilege important for tax law cases? That's easy – your attorney is exempt from testifying against you. That’s right, should your tax liability case go to trial, and you had chosen to work with a CPA or tax preparer for help, your CPA could actually be made to testify against you!

Reason Two – Able to Make the Right Decisions

Only a Tax lawyer will have the experience in achieving tax settlements. While a CPA may be familiar with some tax settlement programs, they will not have a full understanding of the ins-and-outs of the various programs. Tax laws and codes are complex and many times change annually. In addition there are several programs that a troubled taxpayer can use to settle or reduce the amount of tax liability owed that only an experienced tax attorney will know both which program to use as well as how to qualify you for the program. Being under collections process from the IRS is a dangerous time and the wrong advice can be very costly. Do not take any chances with your financial future.

When should you hire a tax attorney?

Needing to hire a tax attorney probably means you are in some hot water with the IRS for one reason or another. The tax professional you choose can either correct the problem or make it worse. This is why you want to make sure you have someone knowledgeable, truthful, and hard-working, working for you, and not against you.

There are deadlines when issues must be resolved to avoid further penalties and poor lines of communication with the IRS do not help in the resolution of your issues. If the IRS ignores your attempts to correct the mistakes, it is time to contact an attorney. An attorney can draft your letters to the IRS in a more direct way that is guaranteed to get the IRS’s attention. Additionally, most tax attorneys have direct contact information for the necessary branches of the IRS where matters should be handled. They can negotiate matters over the phone instead of through writing, effectively ending any communication issues.

IRS Tax Disputes

Most tax disputes arise in the form of an audit of one or several past tax returns. If the IRS notifies you of an audit, you should hire a tax attorney immediately. Your attorney can communicate with the IRS on your behalf, be present during your audit and help negotiate a settlement, if necessary. Having experienced legal counsel helps ensure that you don’t overpay as a result of your audit.

In some instances, taxpayers ignore letters and warnings from the IRS because they’re scared or don’t know how to respond. In those cases, the IRS may have no choice but to threaten you with criminal charges for tax evasion. If you learn that you’re the target of an IRS criminal investigation, you’ll want to hire a tax lawyer—and do it quickly.

Your tax lawyer can reassure the IRS that you’re taking its investigation seriously, work with the IRS in an effort to help you avoid criminal charges and represent you in court if you are charged with a tax crime.

Offer in Compromise

An offer in compromise –“OIC”–is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS will accept your OIC only if you convince the IRS that:

you aren’t able to pay the full amount in a reasonable time, either as a lump sum or over time through a payment agreement
there is doubt as to the amount of your tax liability (unusual), or
due to exceptional circumstances, payment in full would cause an “economic hardship” or be “unfair” or “inequitable”– for example, you can’t work due to health problems, or you’d be left with no money to pay your basic living expenses if you sold your assets to pay your tax bill in full.

If you are unable to pay your federal tax debt, the IRS offers a way to get a new start called a Streamline Offer in Compromise. The Streamline IRS Offer in Compromise program is straightforward with specific criteria and open lines of communication. This program is very manageable for any taxpayer to handle themselves. However, those who do not qualify for the Streamline Offer in Compromise program should consider hiring a tax attorney to handle their IRS negotiations. The IRS has up to two years to accept or reject an Offer in Compromise and the higher your total amount owed, the less likely the IRS is to accept your settlement offer. To begin the OIC process, you must file IRS Form 656, Offer in Compromise and pay a $150 nonrefundable application fee. For full details on the OIC program, see the IRS Form 656 Booklet, available at www.irs.gov.

Tax Evasion or Tax Fraud Charges

Tax evasion and tax fraud are criminal offenses that the IRS charges citizens with when they refuse to file tax returns, pay taxes, or reveal all of their sources of income. These criminal charges bring with them fines, interest on tax owed, prosecution fees, incarceration, and public humiliation. Your name, city, state, and crime are all published on the IRS website. If you have been negotiating with the IRS and two agents come to your office or home to ask further questions, it is time to hire an attorney. Remember that once a formal investigation is opened with the IRS, any information you give them could be self-incriminating. Do not attempt to handle these serious charges without an attorney who can protect your rights and frame your arguments in the most favorable way.