What is an Enrolled Agent?
Enrolled Agents are tax specialists licensed by the US Treasury Department to represent taxpayers before IRS. Enrolled Agents specialize in taxation and are the only professionals required to demonstrate competence in matters of taxation before they may represent a taxpayer. They have to get continuing education on technical tax subjects and ethics to maintain their licenses and professional society memberships.
For every Enrolled Agent in the country, there are about ten CPAs. My specialty is collection issues, something that many CPAs and other Enrolled Agents shy away from. Before becoming an Enrolled Agent, I was an IRS Revenue Officer in its Collection Division for 35 years so I know they system from both sides. I am a member of the National Society of Enrolled Agents and California Society of Enrolled Agents and am the secretary of the California Society of Enrolled Agents Big Valley Chapter.
Ordinary tax return preparers, even those with state licenses, can not represent you before the IRS if you have collection problems.
How much are fees for representation?
Wherever you go, professional fees will be based on the complexity of your case and the amount of time it is expected to take. My overhead is low and my fees are about a third of those charged by big taxpayer assistance companies that have large support staff expenses, run TV commercials, post splashy web sites or inundate your email inbox with spam. I accept credit cards or payments through PayPal. If you check out another company, plan on my fees being much lower. You can find out what others charge by calling them.
Will IRS keep calling me?
No. Once you have signed a power of attorney appointing a representative IRS must deal with your representative. You will still get correspondence from IRS and a copy will be sent to your representative. You can’t grant a power of attorney to an ordinary tax return preparer except for an audit of a return that person prepared. Only Enrolled Agents, Attorneys an CPAs can represent you in collection matters.
Will the IRS Approve My Offer in Compromise or Payment Agreement?
Nobody can answer that question without evaluating your individual situation. If you are considering any tax resolution firm, see if you are asked a lot of questions before being told what they can do or if they are more interested in signing you up. You will probably be talking to a salesman not a tax professional. If you call me, you will talk to me.
IRS will demand an amount that IRS thinks it can collect. You may be able to show you can’t pay anything right now. IRS has strict expense guidelines, which must be analyzed to determine the best way to present your case. For smaller accounts IRS can be more flexible in its demands.
Good News: Late payment penalty charges are reduced by half for taxpayers who get an installment agreement early in the collection process. Bad News: This penalty is doubled if you wait until a levy is threatened. It pays to deal with your tax problems as early as possible. Your wallet will be happy you did.
How long will it take for IRS to make up its mind?
IRS can take six months to a year to investigate an Offer in Compromise. There is nothing that can be done to speed up the process but plenty that you can do to slow it. Your paperwork must be in order right at the start. I will give you comprehensive guidance about what documentation you need and will do research to make sure you are not paying too much. Dealing with other collection issues can be taken care of in a matter of days if the documentation is put together properly.
What more do I have to do?
You have to gather the information necessary for me to prepare an IRS Collection Information Statement. This is the basic document IRS uses to determine how to handle an unpaid tax account. The information on it is personal. No one can gather this information but you. I will send instructions about the information you must provide as soon as I receive your signed power of attorney form and retainer. Don’t procrastinate. It doesn’t matter if you retain me, someone else or nobody: waiting will not make it better.
Are the results I’ve seen on TV Ads true?
Q. I’ve seen a TV ad where an attorney says she got an Offer in Compromise accepted for $20. Is this for real?
A. I don’t doubt this for a moment and wish I knew the facts about that particular, and obviously very unusual case. Tax assistance companies that advertise on TV present their most dramatic success stories and will hope you will think they will do the same for you. I won’t give you a misleading come-on or unrealistic expectations. You may see claims that seem to promise a free lunch but remember, you are you are dealing with a powerful tax collector, not Santa Claus. According to IRS, the average amount paid on accepted offers has been about 17 cents on the dollar but that is meaningless on a case by case basis.
Some of my success stories:
- A client who owed over $400,000 from a string of unfiled returns had an offer accepted for $6,300. That’s right, less than 2%! It can happen.
- A client who could have paid everything submitted an “Effective Tax Administration” offer and paid about 15-percent of what she owed.
- A fiancé paid about 15-percent of what his dearly beloved owed before saying “I do” funding an offer so that they could get married and not have to worry about her tax problems.
- A $30,000 penalty was reduced by 95-percent using simple math.
- A retired couple who thought were resigned to paying $300 a month for over five years settled for $2,700–nine months worth of payments instead of more than 60.
- A client wanted to compromise a state tax bill. Not a good idea: I got him a refund instead.
- True stories; they really happened!
- The flip side: For others, 99 cents on the dollar is not enough or we found a different way. Each case stands on its own.
However bad you think your problems are, they will not get better if you ignore them.
Your private information is not for sale. Period. Except for what must be disclosed to taxing agencies, information about you will be disclosed to nobody unless you authorize the disclosure or I receive a legal subpoena.