Most IRS consultants and specialists are CPAs or enrolled agents (or both). These professionals have expert knowledge of tax accounting and tax laws. That means an IRS problems consultant can offer valuable insight with the following:

• An IRS audit – If you or your business has been targeted by an IRS audit, it doesn’t necessarily mean that you’ve done something wrong. An audit means that you’ll be engaged in ongoing correspondence with the agency. It also means you’ll need to gather accurate financial and tax information to justify your tax position.

  Your IRS consultant can assist with every part of the auditing process. Termed IRS audit representation, this tax service includes maintaining communication with the agency, responding to IRS requests for information, and arguing their client’s position on their client’s behalf. In this way, an IRS problems consultant can save clients time and money by managing complex audit proceedings.

• IRS letters and correspondence – The IRS sends letters to taxpayers for several reasons, most of which require a response. Examples include letters sent to demand payment for owed taxes, to notify taxpayers of a change to their account (a reclassified deduction, for instance) or to request additional information about a tax return.

  Almost all of these issues require immediate attention, even if a response isn’t needed. For example, if the IRS has recategorized a transaction, you may owe additional taxes or will need to adjust your tax strategy going forward.

• An IRS levy or lien – IRS levies and liens are related, but not identical. A tax lien is placed on a taxpayer’s property by the agency to indicate interest in the property should the property’s owner fail to meet their tax obligations on time. You can think of this like other creditor liens, except the IRS gets priority if the property is liquidated. A tax levy is the actual seizure of property that precedes the asset’s sale. The lien comes first, then the levy.

  IRS problems consultants can negotiate on behalf of their clients in order to remove a tax lien. This will require ongoing communication with the agency, accurate form preparation and strong supporting information, which are skills that tax professionals are experienced in.

• Unfiled tax returns – Unfiled tax returns are a common IRS problem for consultants to take on. If you or your business have unfiled tax returns, it may be due to a lack of record keeping or weaknesses in your organization’s tax compliance measures.
  
  

  An IRS problems consultant can take the records you have and use them to prepare back tax returns. If necessary, the tax professional can review your company’s tax compliance standards and identify where potential issues may be occurring. In many cases, tax compliance problems result from weak accounting processes that your tax consultant may be able to assist with.

• Owed back taxes and repayment – If a tax judgment is made against you or your business, you have repayment options. Most choose either an installment repayment plan or an offer-in-compromise (OIC). Installment plans allow taxpayers to pay back their back taxes in monthly payments, but with interest. This additional interest is an important consideration, as it will add significantly to the total tax bill.

  OICs are another common repayment track and can reduce a taxpayer’s bill to pennies on the dollar. However, only a small portion of OICs are approved as they are typically accepted only if the IRS believes it cannot easily recover more from the taxpayer.

  An IRS problems consultant can recommend an optimal repayment plan for their clients, with the goal to minimize tax liabilities and align with the client’s long-term financial picture.