Tax Representation

If you’ve found yourself in hot water with the Tax Authorities (the Internal Revenue Service or your State Tax Department), please consider the following advice. 

Don’t panic.

Dealing with the Tax Authorities is serious business.  The Tax Authorities exist to collect taxes and can bring the full weight and resources of the Federal and/or State government to bear & collect taxes due.  But, more often than not, things are not as bad as they seem.  Most deliquencies are settled more easily than many anticipate.  No matter how dire the situation may seem, remember: you have rights, options, and opportunities.  Returns can be completed or amended.  Income and deductions can be substantiated.  Payment plans can be established.  Under certain circumstances, the amounts due can be negotiated and even reduced.

Don’t wait.

Many taxpayers have a tendency to place tax due notices in a drawer where they can be easily avoided.  They don’t have the money to pay the bill or don’t understand what the letter is saying.  They hope the situation will resolve itself or the Tax Authorities will simply forget about them if they don’t respond.  The collection of past due taxes is an escalating process.  At every stage you have rights and options.  But if you do not respond however, you may forfeit these valuable rights and options.  There are also statutes that may limit the time Tax Authorities have to assess and collect your tax, unless you (often unknowingly) agree to extend the statute.

Don’t go it alone.

Get professional assistance.  At HBS, we are devoted to helping you through trying times such as these.  We are tax professionals who will advocate on your behalf before the tax authorities.  We will investigate the claims of the tax authorities and evaluate those claims in light of the reality and circumstances surrounding those claims. 

If taxes are actually due for the period in question, we will investigate possibilities that may help reduce the assessed total.  Often illness, unexpected hardship, or other circumstances that are beyond your control may have contributed to your tax liability.  Based on our findings, the Taxing Authorities may agree and reduce the amount of your liability.  In other cases, your liability may be offset by overlooked deductions in the same tax year.  Sometimes amending returns for other years can offset much of the total tax due.  If these opportunities do not offset the total tax due, a payment plan merged with smart tax planning may ensure that the tax is paid without a major impact in your lifestyle or business.

And finally, if your financial situation warrants, we can attempt to make an “Offer in Compromise.”  An Offer in Compromise can create a situation in which the Tax Authorities accept an amount less than the full tax due.  Offer in Compromise is a viable tool for many but not as common as many TV commercials make them appear.

The Bottom Line is this: If you or your organization owes tax, you owe the tax.  We cannot make that fact go away.  What we can do is ensure you are treated fairly, that the amount of tax due is legally minimized,  attempt to have penalties abated and, if circumstances warrant, the repayment of your tax liability does not place an undue hardship on you and your family.