Identifying Tax Problems

When it comes to managing personal finances, it can be tricky to know how to proceed. While many people start focusing all of their energy on taking care of the things they need at the moment, the truth of the matter is that there are a lot of things you can do to disrupt your finances that may be easy to ignore at first. For starters, it is crucial to move forward and identify tax issues, even if you haven't focused on them quite yet. Check out these short posts to learn more about how you could be faced with tax problems, and how to resolve the situation for the long run.

Who Should (and Shouldn't) Represent You Before the IRS?


Do you need to appear before an agent of the IRS? The prospect is disconcerting even for the calmest taxpayer. One of the biggest aids you can get at this time is someone to represent you when you have to work in person (or even through other communication) with the IRS. The question is, who should be that representation? Here are a few choices and what may affect your decision to have them represent you. 

1. A Tax Attorney Should Handle Legal Matters

An attorney may represent their client in most — if not all — tax-related matters. If you choose legal help, look for a tax attorney with additional experience and training specifically in tax issues. A tax attorney is one of the most expensive forms of representation but they are the only one who can also represent you in tax court if your case could end up with any legal charges. 

2. An Accountant Should Answers Tough Tax Questions

Certified public accountants are allowed to represent taxpayers through written communication and in person. An accountant is a good choice when your needs focus on specific tax return issues that involve the details of tax preparation — such as how to calculate items, the completion of forms, the validity of deductions, or reporting of income. An accountant speaks the same language as IRS representatives.

3. Enrolled Agents Can Be a Money Saver

A category of tax preparers known as enrolled agents is also authorized to appear for you. Enrolled agents pass a three-part exam administered by the IRS. They are skilled in many of the same subjects as CPAs, but their services often come with a lower price tag. An enrolled agent may not be fully versed in the most complex tax subjects, though. And they, like accountants, cannot represent you in tax court. 

4. You May Represent Yourself in Simple Issues

You do have the option to represent yourself during most IRS matters. The upside is that you save money on less-complex questions, such as providing documentation of expenses in response to an audit. However, most taxpayers' knowledge of the tax code is limited. One hybrid approach is to work with one of these tax pros to prepare for your meeting and then attend it on your own. 

5. Your Friends Probably Shouldn't Represent You

Taxpayers can appoint just about anyone to represent them in most meetings with IRS agents. This includes your brother, your best friend, or your sibling. However, you do get the service you pay for, and even a knowledgeable amateur is still an amateur facing off with professionals. Their usefulness in both proving your case and understanding the IRS process is limited. 

Which of these individuals would be best in your IRS case? While most taxpayers would like to save money, finding the best representation to match your needs is more important. Learn more about these choices by meeting with IRS representation services today. 


18 January 2021