I came across this article recently by Forbes contributor Stephen J. Dunn titled “Representation before IRS“ that started with the line “in tax controversies, who represents you can be the ballgame.” I couldn’t agree more. Dunn goes on to define tax controversy as a “contested matter [to go] before the IRS, civil or criminal, administrative or judicial.” He also strongly recommends that tax controversies not be handled by inexperienced CPA’s, Enrolled Agents and non-tax lawyers because there is just too much to lose.
I agree consumers need qualified tax counsel to represent their controversies and believe that taxpayers needing tax resolution for their IRS tax issues are well served by professionals with the certified tax resolution specialist credential. This extra layer of education goes a long way to distinguish them from other tax professionals who may lack tax controversy expertise.
In the article, Dunn highlights three cases where the tax professionals bit off more than they could chew in dealing with the IRS making the cases worse for these clients.
- An Offshore Voluntary Disclosure Program (OVDP) case ended in disaster because an inexperienced CPA attempted to represent this client’s case concerning foreign accounts by allowing the IRS to interview the taxpayer!
- An IRS audit case of a client with both an LLC and S corporation showed another inexperienced CPA who did not file a protective claim for their client thus making the client unnecessarily pay more IRS taxes.
- An audit case where a costly non-tax lawyer and CPA team represented a client for a year to “resolve the case” only to have the client pay more in taxes, IRS penalties and interest than necessary.
It may be hard for some tax professionals to say “no” to a case that is out of their league, especially if they are representing a good client. However, as Dunn aptly points out, they owe it to their clients to be honest because if the tax controversy case does not go well, (and it may not) the client will not be back to give them business anyway.
When it comes to tax controversies, not all tax firms or individuals are created equal – you just need to know how to hire the right firm. Here are three simple steps that can help you identify who is qualified to take your tax resolution case:
- Google Your Tax Representation – Find out what credentials they have. Make sure all the professionals handling your case are licensed attorneys, CPA’s and Enrolled Agents who are additionally designated as certified tax resolution specialists. These tax specialists deal with the IRS on a daily basis and understand the complexities of IRS protocols and procedures.
- Review the Website of your Tax Representation – Make sure the firm proudly displays the Better Business Bureau (BBB) and TrustLink icons on their homepage. (Avoid companies with no relationship to the BBB) Click on those icons and look for the following
- Consider companies that are older than 2-3 years because it takes this long for a company to have a BBB track record with regards to complaints. NOTE: Some firms may have an A+ rating but have not settled many cases.
- Their rating (avoid firms that have a lower than B rating). Look not just at grade but the total number of reviews. Some “A” reviews only have a handful of reviews versus firms with thousands of reviews and A- or B rating.
- Examine all Trustlink Reviews and check to see how the company deals with conflict resolution. Make sure a high star rating is from more than just a few reviews.
- Don’t be Penny Wise and Pound Foolish! Trying to save a few bucks could cost you in the long run. Instead, be assertive and ask the company if there are hidden fees, upsells or upcharges either now or in the future. Understand what the costs will be from start to finish including the appeal process before you sign a retainer agreement. BE AWARE: Some firms and professionals quote low fees to hook clients then ask for more money in a few months.
Just remember, it’s important you do your homework and research your tax representation online before you hire them to represent you. This information search can reveal a lot – both good and bad and will be worth the effort. Need of some tax relief? Check out our company, Tax Resolution Services, Co. and see how we measure up!
More Tax Help, IRS News and Tax Relief Tips:
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- Tax Resolution Services Success Story – Client Saves $30k