Taxworks, Inc. specializes in taxpayer representation for Collection and Audit situations. Whenever a taxpayer interfaces with the Internal Revenue Service for Collection or Audit purposes the taxpayer is confronted with a new set of regulations and procedures that most taxpayers never encounter. It is essential for the taxpayer to be represented in these situations by competent counsel, a qualified taxpayer representation consultant. Enrolled Agents, Certified Public Accountants, and Attorneys are the only professionals designated by the U. S. Department of Treasury to manage situations requiring taxpayer representation before the IRS. Of these three designees only Enrolled Agents are directly licensed by the Department of Treasury. Enrolled Agents are specially trained to act as consultants in Collection and Audit matters.
Collection encompasses the entire area of contact between the Collection Division of the Internal Revenue Service and a taxpayer. IRS personnel who work in the Collection Division are referred to as Revenue Officers. Collection activities begin after an assessment of tax liability has been made. Generally the taxpayer will receive a series of letters from IRS requesting payment in stronger and stronger language with each successive notice. Each letter has a number in the upper right hand corner such as 503, 504 or 1058. Each numbered letter has a different legal significance. Here the ordinary taxpayer is at a real disadvantage. The rules and regulations for dealing with the Collection Division are complicated and not well publicized. Although the taxpayer is dealing with the administrative area of income tax collection each of the taxpayer responses or lack of response is noted on their record. The information obtained from the taxpayer via correspondence or phone calls is also recorded. This may include banking and employment information that can be used to garnish wages or levy bank accounts. Although your friend, the internet can be of help in searching for information about a puplication or letter type (visit google.com and enter: irs 503, a taxpayer is typically better off seeking professional help from a qualified taxpayer representation professional in responding to IRS notices. Often the notices are in error. Many times taxpayers simply pay the requested amount without hesitation "just to avoid any problem with IRS." Some taxpayers will pay amounts they know they don't owe for the same reason. The consultant can often correct the IRS error with a phone call, fax or brief letter. He/she has already done the research in the past and can cut to the chase in an expedient manner.
Large amounts owed to IRS present another set of circumstances. Often the amount owing has grown due to penalties and interest over time to a sum that the taxpayer cannot possibly pay at once. Here your taxpayer representation professional can be of help in setting up an Installment Agreement that the taxpayer can afford. Due to facts and circumstances, sometimes the taxpayer can pay nothing on the past due amount. The IRS cannot create a "hardship" on the taxpayer in collecting past due taxes. Hardship is defined by the IRS, not the taxpayer. Taxpayers will not be allowed to live a lavish lifestyle while owing taxes. IRS has published a set of Collection Standards that determine how much a taxpayer can spend on personal items, housing, transportation, life insurance, medical expenses, etc. is calculating how many dollars the taxpayer can be forced to pay against the tax liability. A taxpayer representation specialist can offer help in calculating an affordable Installment Agreement or achieving Currently Not Collectable status.
If the taxpayer wants to negotiate to make a lump sum payment to settle with the IRS, an Offer in Compromise is the vehicle for such negotiation. Again, IRS makes the rules. Your consultant can navigate through the maze of rules and regulations to arrive at the best possible outcome.
The IRS has an arsenal of tools it can use to collect past due taxes. IRS Liens can be placed on a taxpayer's property. Bank or investment accounts can be levied. Wages can be garnished. Under extreme circumstances physical assets may be seized. These measures are taken when the amount of tax due reaches certain levels and other collection methods have failed. All of these drastic collection measures can be effectively handled by a trained, competent, taxpayer representation professional.