What is tax representation and do I need tax representation?

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Tax representation is the business of representing a taxpayer or taxpayers before the IRS for unpaid taxes or unassessed taxes, penalties and interest for a personal, business or payroll tax return(s).  Over the last ten or fifteen years the tax representation business has flourished.  Unfortunately not all companies provide quality service.  Over the last couple of years the government has shut down several national tax representation businesses.  These companies would offer to file an offer in compromise, usually for “pennies on the dollar”.  After obtaining a significant retainer they would file the offer even if the taxpayer did not qualify.  Then the company would ask for additional money to file the appeal or try another method.

A good tax representative will obtain information from the taxpayer to determine whether they can qualify for an offer in compromise or if another alternative may be necessary.  This is usually a process that can take from a couple of weeks to a couple of months.    The taxpayer will provide various documents to prove his income and expenses over a period of time.  The taxpayer will also provide information regarding their assets.  There is other information needed but that information is specific and may not be needed for all taxpayers.  Each situation is unique and needs to be reviewed on a case by case basis.  Tax representation is not a one size fits all business.

Unless you are able to write a check to the IRS for the full balance you may owe, the answer to the second part of the question is “yes”.  A tax representative can give you guidance through the maze of forms that are out there that need to be filed.  They will also be able to help determine various strategies and help you choose which might be the best for your particular situation.  Give me a call and let me help you through your situation.

 

Posted on May 24, 2014

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