What to Expect
Special Reports Home
Home Services Resources Special Reports Tax Tips Hot Topics About Us
Our goal is to help you resolve your tax problems.
In the course of this you will experience many things.
The old saying, "the price varies depending on the attitude of the customer" applies to how you handle the process of resolving your tax problems. This letter will address the key factor affecting your case, namely the psychology of the game. The Taxpayers' Bill of Rights provides that you can have a representative handle any Internal Revenue Service matter for you. When you have a representative, more commonly known as a ‘Power of Attorney’ (POA), the Internal Revenue Service is required to communicate directly with the POA. The Internal Revenue Service is not allowed to contact you directly in person or by telephone without fInternal Revenue Servicet getting the POA’s permission. The Internal Revenue Service is not allowed to by-pass the POA and communicate directly with you unless the POA is uncooperative with the Internal Revenue Service. However, correspondence will still be sent to you and the POA simultaneously. This particular endeavor is going to be stressful, especially for people who do not deal with the Internal Revenue Service or State, or other government agencies on a regular basis. You will be faced with stresses you may not have experienced before.
It is a popular pastime to hate the people who work for the Internal Revenue Service. It is also popular for many people to assume there is a mandate for Internal Revenue Service and State agents to be polite and understanding. Do not be under any illusions about this. While the business of tax collecting can be traumatic for you, most Internal Revenue Service and State agents recognize this as a job. IT IS NOT A PERSONAL VENDETTA. Internal Revenue Service and State agents are professionals who carry out their duties with all the serious intent and manner of any professional. They must review and imply all standards of reason and prudence. You may resent questions, especially when it is thought the questions by the Internal Revenue Service or State agent appear to malign your reputation or judgment. However, remember the agents who do this for a living have probably run into your "profile" before and have a fairly standard mechanism for approaching you. For example, it is common for an agent to be very aggressive in the initial meeting. Later, that approach may mellow. Most agents want you to know "where they're coming from" so you don't misunderstand. This is especially true of collections agents.
Everyone has pride. For whatever reason, you may be faced with a tax debt that is beyond your ability to pay. You have no where else to go without hurting the way you will live for the rest of your life. Maybe you chose to pay certain bills instead of taxes, or decided to enter a business that did not perform as you had wished. Maybe you made decisions in your past financial life which caused tax indebtedness. And maybe you're one of thousands recovering from a bad relationship, addiction or other condition which has had a paralyzing effect on your financial life.
The point is, you are in trouble. Your tax debt seems overwhelming and you need to take positive, assertive steps to get your life in order. The tax debt, by itself, is not a moral issue. It's just a lot of money that needs to be paid or negotiated downward. It's a Business Issue. Therefore, if you take a mental step aside to review your own case from a distance, you will better understand the particular perspectives a tax professional and an Internal Revenue Service or State agent may have of your case. This emotional detachment from the issue at hand is ESSENTIAL. It will allow you to deal with the problems you'll face as your case evolves. This approach does not mean you will avoid anger or frustration. What this means is that you must, with a clear mind, understand and evaluate the various perspectives presented by the Internal Revenue Service or State agent in charge of your case. Emotions can run high in you and your family. Feelings of hopelessness, anger and frustration may occur. If you know in advance these things may happen, it may be much easier to realize the effect those emotions have on the business at hand. Furthermore, recognition of these emotions during the course of your dealings with the Internal Revenue Service or State will help you in other business endeavors. Remind yourself that the frustration you feel is probably not being able to control the immediate outcome. If you have a legitimate and sound case, the result will be positive. Don't expect your case will be settled necessarily for ten cents (or five cents) on the dollar. Your particular settlement or installment agreement is likely to be different, based on the facts. Look at what you get rather than what you don't get.
Even if you retain a qualified professional to handle your case, expect to provide oppressive amounts of backup detail to support the information given to the Internal Revenue Service or State.
This brings us to the next point. Expect this process to be entirely inconvenient to your personal and professional schedule. The application and process of your case can last from four to eighteen months. The paperwork may be overwhelming, especially if you have not kept records, or if you have not filed past returns. The basis for a good case process consists of good records. Expect this work to interfere with social plans or a pleasant summer day. This will certainly cause some resentment in you and you will be tempted to delay the work, even if the Internal Revenue Service or State agent is asking for additional records for your file. You may feel that you have already done the work and that it is already with the application. Be prepared for repeated requests for records such as canceled checks and bank statements, court documents showing judgments, financial statements, inventory lists and so on. As a result of these requests, you will be writing letters, making phone calls or you will be busy re-creating expense histories to substantiate records you may not have. It is possible you will have to take some time during the day to make phone calls from a private place. If you need bank records, the only time you can call may be during your lunch break. The process is very inconvenient, so this is a time when it is helpful to remember how much money you stand to save and the prospect of solving your Internal Revenue Service or State tax problem.
The temptation during this phase is to procrastinate. The effect of procrastination, however, goes beyond just feeling guilty. The Internal Revenue Service or State agent has your file on his/her desk during processing and wants to complete your case quickly and efficiently. The longer your file sits there, the more frustrating the case will be to the agent. If you become somewhat casual in your response to requests, the agent may not be open to offering you a quick and agreeable answer. Internal Revenue Service and State agents are people who just want to get through the day like anyone else. In any government bureaucracy, current files tend to take priority over older files. This may happen because a superior has placed "higher priority" cases on the agent's desk, or if the agent perceives a lack of assertiveness by you or tax professional your case may not be kept on the "top of the stack". In some cases, delay may be beneficial to you, but for the most part, delays should be avoided. An agent may feel older files are a nuisance when they seem to lose momentum. It is strongly recommended you respond quickly and cheerfully to any request for information. Do it even if you don't feel like it. Added pressure may be in store for you if you are being pursued by the Collections agents.
In summary, it is important you recognize the particular stresses associated with dealing with the Internal Revenue Service. The stresses are even more pronounced because you are close to the problem and the outcome affects your life in a massive way. The key to a successful application is an even-tempered approach and an obvious, sincere desire to negotiate a mutually agreeable settlement. In a sense, this means you are helping the agent do his job. This doesn't mean you have to "give away the farm", but your apparent cooperation and detachment will defuse any natural antagonism you and the Internal Revenue Service or State agent may have. Obviously, the agent's job is to settle for as much as possible while you want to give as little as possible. The odds are in your favor if you do not react with anger and frustration. If you allow yourself an outburst with the agent in charge of your case, it will likely cost you money. If necessary, find someone else to vent your frustration with before speaking to the revenue agent, preferably someone who will hear you out without "egging you on". Go running, walking, swimming or some other exercise to burn off your frustration. You cannot afford to take it out on the revenue agent.
Be aware that the Internal Revenue Service and State is continually changing the way they evaluate financial data. These changes may affect you in a big way, for good or bad. What was expected in the beginning of the case can vary widely if the Internal Revenue Service or State has changed laws, policies or procedures that are applied retroactively or imposed on you immediately. While professionals are on top of these changes, they are not as immediately informed as is an Internal Revenue Service or State agent.
You also need to be aware that your Representative is licensed by the Federal Government, and that the government holds him responsible for reasonable progress in your case. If a case is delayed due to procrastination by the client, or for any reason that’s not excusable, the Internal Revenue Service and State may hold Representatives to be responsible. When a Representative is unable to get the cooperation from a client to make reasonable progress he is forced to close the case and revoke all powers given. In that event, additional retainers may be required to re-establish your case and regain control. In the interim adverse actions may be taken by the Internal Revenue Service or State that may not be reversible.
Copyright © 2001-2020 Gary W. Lundgren, EA All rights reserved.