Need Help?
Finding a reliable tax professional while facing significant amounts of tax debt can add stress to an already tumultuous time in your life. However, attempting to navigate tax law alone could lead to more debt and penalties if you are unsure of what you are doing. The added cost and time of seeking professional help will be well worth having the peace of mind.
“Tax Professional” is a broad term – how can you find the right person for your situation? The important thing is to do your research. Know exactly what kind of tax debt problems you are facing and review your possible options for relief. Then you will be able to determine what tax service you will need to seek and which tax professional specializes in that field.
There are different kinds of tax professionals that have the knowledge and skill to handle large amount of tax debt liability, however each field will specialize in different aspects of tax debt so it’s best to not only review the list below, but to thoroughly discuss your unique situation with each tax professional you are considering to find the right specialist for you.
Taxpayer Advocate Service
Within the Internal Revenue Service is an independent organization designed to help taxpayers who are having problems resolving tax issues. This free Taxpayer Advocate service is available to those who:
- Face economic harm or significant cost
- Have experienced a delay of more than 30 days for a resolution of a tax issue
- Have not received response or resolution by the IRS promised date
There is at least one Local Taxpayer Advocate in each state, to find the office near you, visit the official site on IRS.gov. Since they are part of the IRS, the Taxpayer Advocate Service is well versed in all aspects of tax law and will listen to your situation, as well as help you understand the problem and possible resolutions. Your Local Advocate will help you with advice and guidance until the issue is resolved.
Certified Public Accountant
A Certified Public Accountant or CPA, can legally represent and advise you as well as prepare income tax returns. Typically, accountants are known for their attention to detail; thus making them very useful in an audit situation. You may also want to contact a CPA if you are filing or re-filing any tax returns from previous years. Be sure to inquire as to how much experience the CPA you are interviewing has in dealing directly with the IRS.
CPA’s must pass the Uniform Certified Public Accountant Examination – and in most states, are only allowed to take the exam after completing their bachelor’s degree and an additional year of study. Before a CPA can begin practicing however, they must become certified and licensed by their individual state. Although not required, many CPAs have membership in the American Institute of Certified Public Accountants (AICPA). Inclusion in the AICPA requires CPAs to abide by codes of conduct and ethics as well as continue their professional education. The AICPA website provides a useful and reliable tool to allow you to search for a CPA near you. Click here to find a CPA/Personal Financial Specialist near you.
Tax Attorney
A tax attorney may be your best option when you are facing large amounts of IRS tax debt, or if you are being accused of more serious crimes such as tax fraud or tax evasion. One of the major benefits of choosing a tax attorney over another qualified tax professional is the attorney-client privilege. Attorney-client privilege is a legal concept which keeps all client/attorney communications confidential. Your attorney (unlike other tax professionals) cannot be called upon in criminal court to testify against you.
Like all practicing attorneys, a good tax lawyer will have a Juris Doctorate degree and will have passed their state bar exam. The American Bar Association is a voluntary association of lawyers, which sets standards for law academia, ethics and conduct. The ABA also offers many useful tools for finding and researching attorneys. For help and information by state visit www.findlegalhelp.org.
Enrolled Agent
Enrolled Agents (EAs) are the only tax professionals tested and certified by the Internal Revenue Service. As such, Enrolled Agents generally have the most experience dealing with the IRS and knowledge of the extensive, highly complex tax law. Like tax attorneys and CPAs, an EA can represent you in any tax proceeding or audit. Working with an enrolled agent offers a certain level of client privilege, but protection does not apply in criminal cases.
To become an Enrolled Agent, a prospective EA files an application with the IRS, and then must past the three part, two day Special Enrollment Examination; or must have been employed with the IRS for a minimum of five continuous years. After the agent has passed, they are also subject to a background check and a personal tax compliance review. Enrolled Agents may choose to join the National Association of Enrolled Agents (NAEA). Similar to other such organizations, the NAEA establishes codes of ethics and professional conduct, while providing advocacy and supporting continued education. They too offer useful services to seek out an Enrolled Agent at NAEA search.
No matter what kind of tax professional you are seeking assistance from you should take the same diligent steps in selecting one.
1. Consult your social network. If you have friends or family that have faced similar tax debt situations in the past, look to them for referrals. You could also ask your accountant or family lawyer if they have any recommendations or contacts.
2. Avoid firms that sound too good to be true or offer to settle for ‘pennies on the dollar.’ There are several highly reputable firms to be found, but avoid firms that offer to settle your tax debt for significantly less without determining your specific tax situation. Also, make sure that you are conversing with the actual tax specialist you are seeking and not a sales person.
3. Determine cost up front. Avoid firms that require a retainer fee; they are most likely more interested in taking your money then helping you figure out how to keep it. A retainer allows them to change the cost at any time, no matter if they succeeded in helping you or not. All fees and charges should be made clear before any work is done. Most tax professionals will charge a flat or hourly rate.
4. Determine their credentials and research their references. A reliable tax professional should be more than happy to provide credentials, proof of certifications and references. Don’t hesitate to follow up or contact them, as well as research them independently with the Better Business Bureau.