3 Situations Where You Need IRS Representation

Dealing with the Internal Revenue Service (IRS) can not only be stressful, it can also be fraught with complexities such as legal agreements and settlements. Is utilizing an IRS representative the right course of action for you? Here are a few situations where it may benefit you to look into IRS representation.

What Is an IRS Representative?

An IRS representative is a person who is authorized to speak, negotiate, and advocate on your behalf directly with the tax agency. This person could be an accountant, a tax lawyer, or an IRS-licensed enrolled agent. An IRS representative is your guide through the complex workings of the tax code. When you work with a representative, you are giving them the power to make agreements on your behalf, which in some cases you will be legally bound to.

Attorney-Client Privilege in Tax Law

Of all the forms of IRS representatives available to you, only tax lawyers can retain attorney-client privilege should the case be brought to court. Other representatives, such as an accountant, may legally be asked to testify against you.

Audits for Individuals

Individual taxpayers may be audited by the IRS for a number of reasons. While not all individual audits will necessitate IRS representation, if you are being audited under suspicion of tax fraud or tax evasion, then it may be wise to retain legal counsel. In simpler audit cases, however, you may choose to work with an accountant or not have any representation at all. If an installment plan or other agreement is needed from an audit, either a tax lawyer or accountant can provide guidance for the next steps.

Audits for Businesses

Businesses may benefit from retaining a tax lawyer regardless of whether they are being audited or not. A tax lawyer can assist a small or large business in the structure of their company, the articles of incorporation, and international tax law as applicable. If a business is being audited, it would be wise to consult with a tax lawyer or accountant. Agreements and settlements that result from an audit are legally binding for the business, and most business people would benefit from legal review of any agreements, regardless of the type of contract.

Agreements and Lawsuits With the IRS

Image via Flickr by Brian Turner

There are a few cases in which retaining IRS representation is wise no matter if you are an individual or a business. If you are under criminal investigation by the IRS, are being audited for tax evasion or tax fraud, have a backlog of unfiled tax returns, or are under tax liens, levies, or are looking at significant penalties, invest in IRS representation to understand your options. Also, look into IRS representation if you are entering into an agreement or settlement with the IRS. Choose whether you’d be best represented by a tax lawyer or accountant, depending on your situation, and inform the IRS of your choice.

Tax audits, settlements, and agreements are full of complexities that create a steep learning curve for the individual or businessperson interacting with the IRS. By working with a qualified IRS representative, you can benefit from his or her understanding of tax code and legal agreements.



One thought on “3 Situations Where You Need IRS Representation

  1. You got my attention when you said that it’s best to hire an accountant if you’re being audited because of tax fraud or tax evasion. My husband said that his mother is being questioned because of her tax dues. He wanted his mother to get help in IRS representation to prove that all her tax dues are being paid on time, so I’ll share your blog with him.

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