You received an audit notice from the IRS. Or maybe you’ve already been audited and hate the result. Or you ignored audit notices, and now the IRS has put a lien on your house and levied your accounts. Here’s the top five reasons to hire a tax lawyer, rather than handle a tax problem on your own.
Reason #5 to Hire a Tax Lawyer: Avoid Wait Times
If you’ve tried calling an IRS help line recently, then you know you can wait on hold for hours and still not have your call answered. Or, you’ll be waiting and when the clock strikes 5 pm, you’re disconnected. Ouch. Last year, only 10% of calls to IRS help lines were answered. Why? Because the IRS was already understaffed due to a decade of budget cuts before Covid. Then Covid added to the IRS’s workload (all those PPP payments were sent out by the IRS) and IRS employees were largely unable to work for almost a year because sensitive IRS databases cannot be accessed except at the office. So, while IRS employees were working from home, most weren’t working on the tax issues needing attention.
I get around long wait times because I pay a service that essentially waits for me (and other people who pay them) on hold, until I jump on the phone and I take over their space. It’s a brilliant entrepreneurial idea, but also evidence of how bad IRS responsiveness has become. (If this steams you the way it steams me, then consider cheerleading for the increased funding to the IRS that was recently passed.) Hiring a tax lawyer will almost always get you initial answers faster than doing it on your own.
Reason #4: Tax Lawyers Don’t Take It Personally
Many of my clients are shocked, then angered, that the IRS (and California tax agencies) have the legal right to demand taxpayers provide proof for all deductions claimed on their tax returns. Many feel it’s a gross invasion of privacy. Possibly. But it’s also the law. Congress has put the burden of proof for almost every line on a tax return entirely on the taxpayer. The only exception is income, which the IRS must prove.
Most people naturally become defensive and even angry when an IRS auditor starts questioning and demanding proof. That’s never a good strategy for getting the best audit outcome. IRS agents are doing their jobs, not seeking to hound taxpayers, even if it may feel that way. Unresponsive and snippy answers suggest something to hide and thus invite auditors to open other tax years or lines of a tax return to audit. Requests for documentation aren’t personal for me. It’s part of my workday. And I’ve always found I meet my clients’ goals more effectively when I’m cooperative and polite than when I’m an obnoxious pitbull.
Reason #3: Tax Lawyers Speak “IRS”
Many communications from the IRS are impossible to understand. Take a look at Form 4549 Report of Income Tax Examination Changes here. How easily could you read this document if it were filled in for an audit of your taxes? My guess: unless you see these and other IRS forms all the time, most are hard-to-follow. One of the main things I do as a tax lawyer is interpret the bureaucratic language of the IRS into something civilians can understand. You cannot successfully respond to the IRS and plead your case if you can’t speak their language. Tax lawyers help you make your most persuasive case to the IRS.
Reason #2: Tax Lawyers Help You Identify and Correct IRS Agent Mistakes
Were you lucky enough to reach an IRS agent and get an answer to your case? Excellent! Think you can trust what they told you? No. You cannot.
In fact, taxpayers who have taken the IRS to court because IRS employees gave them the wrong answer or advice, have been told by the U.S. Tax that taxpayers cannot rely on what IRS agents say; they must assume IRS employees could be wrong. Seriously. I cannot make this stuff up: the agency charged with implementing our tax laws cannot be trusted to get it right. Okey-dokey. So, if we can’t call the IRS for an answer, then who can we turn to? Yup! Guys like me! If you get answer from the IRS that you’re uncomfortable with, or if you get two different answers to the same question from two IRS employees, then call a tax attorney, please.
The #1 Reason: Tax Lawyers are Like GPS for the IRS
Would you drive in a foreign country with bad signs, nasty traffic cops speaking Klingon, and an uncertain destination without GPS, or at least an old-fashioned map (you can see one here if you’re unfamiliar)? I hope not. The same should be true of the IRS and the FTB – enormous bureaucracies with impenetrable rules, sometimes-inept agents, and extreme power over your financial matters. I wish every taxpayer could navigate an audit, lien, levy, or repayment of back taxes on their own. But they cannot. Many need at least a bit of guidance understanding and navigating the IRS and FTB.
Tax lawyers, especially ones like me who used to work at the IRS, know what the solution to your problem looks like and how to get the desired outcome the fastest and easiest. Hiring a tax lawyer may look like a costly thing to do (and it often is costly) but it also could save you far more in taxes than what you spend to hire someone like me. Call me and tell me what’s going on and I’ll give you my best assessment of what you need to do, and whether you can do it on your own, or need to hire help.
Call me: I tell lots of prospective clients what to try first on their own with the IRS and, if it doesn’t work, to come back to me.
February 10, 2023