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Questions to Ask Before Hiring a Tax Attorney, CPA or Tax Resolution Specialist to Solve Your IRS Tax Problems
Hiring the right tax professional - whether it's a tax lawyer, certified public account or Certified tax resolution firm - is vital to your survival against an IRS audit or tax problem. Here is a checklist of questions you will want to ask a tax attorney or tax resolution specialist to ensure you get the IRS tax help you need.
Finding a tax professional to solve your tax problems is like the end of Indiana Jones and the Last Crusade. Make the right choice and all your wounds will be healed. Make the wrong choice and you'll be turned into a screaming shriveled skeleton. Whether it's a tax lawyer, certified public account or certified tax resolution specialist (CTRS), it's important to choose your tax representative wisely.
If you've got tax problems, like delinquent tax returns, back taxes, payroll taxes or other tax collection or audit issues, your first instinct may be to open up the yellow pages under "tax attorney," Google "tax lawyer" or ask around for tax problem resolution specialist recommendations. Great, now you've got some names of tax attorneys, but how can you find the right tax lawyer or tax problem resolution expert to give you the IRS help you need?
To avoid paying a tax attorney or tax debt relief firm's high hourly rate unnecessarily, go through this tax attorney/CPA/tax resolution specialist interview checklist first. This tax attorney interview checklist will help you weed out the tax relief scammers, as well as the merely inept tax attorneys and CPAs out there who will leave you with their high fees, your original tax debt, plus additional penalties and charges.
Print out this article and ask the following questions.
Before you face a tax attorney or tax resolution professional, first look in the mirror to get a handle on your tax problem.
- Are you looking at personal income tax issues (you are an innocent spouse or a victim of tax fraud), business tax problems (such as unpaid payroll taxes, sales taxes), estate taxes, foundation or charity tax issues?
- Are you dealing with just federal or state taxes too?
- Do you have tax problems in multiple states or jurisdictions?
- Does the IRS know about the issue yet or have you just discovered it?
- Did the IRS contact you but you've buried your head in the sand hoping it would go away?
- Are your records a shambles?
- Can you attempt a true reckoning of what happened?
- Has the IRS come to your home or place of business?
- Has the IRS demanded an in-person audit?
- Has the IRS garnished your wages, put in tax liens or seized any property?
Answering these questions will help you decide what kind of tax help you need.
When you get tax problem resolution professional recommendations from friends, you need to compare apples to apples. While a CPA will have a cheaper hourly rate than a great tax attorney, they can't do what a good tax attorney can. A great CPA can put your tax records in order so you can get a true accounting of the "historical" road just travelled, but they probably shouldn't take you into battle with the IRS because they don't spend all their time negotiating tax resolutions the way specialized tax resolution professionals do. You need someone who battles the IRS for a living, who has learned the latest laws and knows all the secrets to helping resolve your tax problem. That's why some tax resolution firms offer a team of expert tax professionals including tax attorneys, certified tax resolution specialists and CPAs to help you get the best possible outcome for your tax settlement.
So before you rack up those high hourly charges from a tax attorney or CPA, you need to make sure you are talking to the right tax resolution professional who can do the job for you. You will be hiring this tax attorney, so treat your initial consultation as what it should be, a job interview.
Questions to ask a tax attorney, CPA or certified tax resolution specialist:
About the firm:
- 1. How long has this tax attorney/ tax resolution firm been in business solving IRS problems? The longer they have been handling negotiations with the IRS the better. A lawyer or CPA firm may just do tax law on the side and not be dedicated to knowing the ins and outs of IRS negotiations.
- 2. How many tax attorneys do they have on staff? (Some firms are only CPAs, some are nothing but former IRS agents, some are straight law firms with only one or two tax attorneys). If you don't do tax resolution day in and day out, you don't know all the loopholes, tricks and tools. Look for someone who is a certified tax resolution specialist, they have to take a special exam and have a number of years of experience and continuing education in this field. There are only about 200 in the entire country who actually do this as a living.
- 3. What is the tax attorney or tax resolution firm's success rate with tax cases? Don't take a generic number here. Ask about the success rate for cases like yours. Don't expect a perfect score. For example in most cases the Offer in Compromise is a starting offer. Only about 2% are immediately accepted by the IRS. The more important number is comparing cases like yours. What is the total dollar amount negotiated in settlements divided by total dollars in tax, interest and penalties owed? In short, how much did these tax attorneys save their clients?
- 4. Do they offer a guarantee? Run away if they do. No one can guarantee anything.
- 5. Does the law firm or tax resolution company want all the money up front? If they do, run. Once tax professionals have your money, they have no incentive to go the extra mile for you. If your tax attorney, tax resolution specialist or CPA wants some "good faith money" that's fine.
- 6. Do they give you a high pressure sales pitch? If they are pushing that hard, that's a warning sign to stay away. In many cases when you get a sales pitch you are talking with a salesperson, not a tax attorney or tax resolution specialist who can help you.
- 7. Check out your potential tax attorney or tax resolution firm with the Better Business Bureau, but keep in mind the volume of people the company serves. If the company has 20 complaints over three years but has served 5,000 clients in that time, that's a 0.4% failure rate, or said differently a 99.6% satisfaction rate. Even that can be misleading because the BBB only tracks complaints, not resolutions. Even if the client got a full refund from the tax attorney and 100% satisfaction, the client can't withdraw their complaint once it is filed with the BBB. You could also Google the tax resolution firm's name or individual tax attorney's name with the words "complaint," "rip-off" and "scam." And if they are a tax attorney, check with your state's bar to see if they have any complaints against them.
- 8. Ask for the names of the people who own the law firm or tax resolution company. If your contact is elusive on this, run. Bottom line, you need to know who runs the show. You need the name of the owner, NOT the senior tax attorney. If your IRS case goes south or the tax attorney handling your case is a problem, you need to know exactly who you can complain to or who to seek redress from.
- 9. Find out the name of the tax attorney or tax resolution specialist who will be taking your case. Find out how quickly they respond to your inquiries. Do they answer their phone or email promptly? Ask for references of satisfied customers for that specific tax attorney or tax resolution professional. (Given the confidentiality of tax resolution work, a personal reference for a tax attorney might be hard to come by.)
- 10. Does the tax attorney or tax resolution firm have experience in multi-jurisdictional issues? Because the IRS is a federal agency, there are three people permitted to practice before the IRS. You have to be an active licensed member of the state bar, a certified public accountant actively licensed or an enrolled agent. No matter where they live, they can represent the taxpayer before the IRS is all 50 states.
- 11. Will this tax attorney or tax resolution specialist go with you to an in-person audit? Although 90% of tax resolution work is done over the phone, electronically or via FedEx, sometimes you need a tax attorney to literally hold your hand in an audit. But don't choose a tax attorney just because they have an office near your home. An accident of geography doesn't mean they are the right tax attorney for the job. In many cases a national firm such as ours can make sure you never have to darken the door of an IRS audit.
- 12. How can they help you if the IRS wants to come to your home or business?
- 13. Is the firm just a tax form filler? Just because they prepare a lot tax returns doesn't mean they are ready to battle the IRS. There are a number of tax resolution and "tax attorney" scams that do nothing but type up an Offer in Compromise and just mail it to the IRS. That's all the service these "tax attorneys" provide. These companies are at best, a waste of time and money and at worst, a one-way ticket to big trouble.
- 14. What are their prices? Don't be penny-wise but pound-foolish. Don't just lock onto a tax attorney or tax resolution firm's low price. Look for value and the number of services you get. Will this tax attorney or tax resolution professional give you preparation of all IRS forms, all backup documentation, and all negotiation with the IRS?
When you meet or interview your tax resolution specialist or tax attorney ask them:
- 1. Where did this tax attorney or CPA go to school for tax resolution? How current are they (how much continuing education is this tax attorney taking)?
- 2. How long has this tax attorney or tax professional practiced tax resolution, not straight tax law but real battle with the IRS for tax resolution?
- 3. What percentage of their jobs are tax problems like yours?
- 4. Who is their direct supervisor? What is their contact information?
- 5. Does the individual tax attorney, CPA or tax resolution specialist have references?
- 6. What is his/her personal success rate? (How many Offers in Compromise settlements have been accepted and what was the negotiated amount owed versus the initial amount of taxes owed and penalties? In short, how much has this individual tax attorney or tax resolution professional saved clients? How does this tax attorney or tax resolution specialist compare to the rest of the firm: above average or below?)
- 7. What sorts of releases for tax liens, levies, etc. have they achieved? How fast?
- 8. What sorts of penalties (like mine) have this tax attorney/ tax resolution specialist gotten waived?
- 9. What sorts of installment agreements in situations like mine has this tax attorney or tax resolution professional negotiated and what was the payment schedule?
Once you are convinced you have found the tax attorney or tax resolution specialist that can help you, you'll feel like you've found the Holy Grail. Choose wisely.
For more information on achieving a tax resolution for your IRS problems or back taxes, visit www.taxresolution.com for a free tax relief consultation or call 866-IRS-PROBLEMS.
Michael Rozbruch, one of the nation's leading tax experts, is a Certified Tax Resolution Specialist (CTRS), licensed CPA in the state of Maryland and the founder of Tax Resolution Services (http://www.taxresolution.com/). He teams up with an expert staff of tax attorneys, CPAs, and tax relief professionals to help individuals and small businesses solve their IRS problems with tax liens, unfiled back taxes, offers in compromise, wage levies, tax relief, delinquent returns, tax debt installment plans, bankruptcy and protecting an innocent spouse from unfair tax burdens.