do I need professional help?

Discussion in 'Credit Talk' started by crowmom, Oct 1, 2003.

  1. crowmom

    crowmom Well-Known Member

    No, not that kind of professional help, lol....

    What I mean is, should I hire a tax attorney to deal with the back taxes I owe, or is that something I can tackle myself? I never thought I could figure out all this credit scoring/repair stuff, but I feel pretty confident about it now, so I'm wondering if I could do the same with my tax problems?

    Brief background: DH and I havent filed taxes for a few years. Long story short, we were owed income tax returns, but we were afraid to file because there were inaccurate child support issues, and we were afraid the govt would take all our refunds and apply them to what they think he owes in child support. We kept trying to fix the inaccuracies, but dealing with Child Support Enforcement is like talking to a brick wall. Anyway, the last 2 years, DH claimed 'exempt' status and didnt pay anything, so obviously, we owe the IRS.

    They havent come after us at all, but we're afraid they will soon, and I dont even want to know how horrible it would be to have a tax lien on our Credit Reports. We think we owe around 15,000, and we're ready to pay up, but we'd like to either make payments, or (ideally) make what's called an "Offer in Compromise" which is essentially an offer to settle a debt for less than the original amount. I've researched a bit about tax attorneys, and the best I've found so far wants $1,500.00 up front! and then, if he can get the IRS to settle for an "offer in compromise" he wants us to pay him another $1,000.00.

    So what do you guys think? Is paying a tax attorney to fix my tax problems a waste? (like paying for credit repair is?) Could I do this myself? Anyone know of any do-it-yourself tax sites as good as this one is for credit repair?

  2. DanS

    DanS Well-Known Member

    As someone who fought these battles alone for years, let me tell you two things I learned the Hardest Possible Way.

    1) Always file, regardless of ability to pay or actual amount owed. Once they file on "your behalf", you have lost important rights and leverage down the road.

    2) Get experienced help. I would look for a competent CPA who has extensive experience dealing with/negotiating w/the IRS. You need to get your returns in order and that person can help you, with an eye towards what will happen after you file.

    You can work out terms or an OIC once you file - are you sensing a theme here?

    I urge you to not try to do this yourself. I did, thought I was on top of it, and wound up getting help after my self done OIC was rejected after three years in appeal. Once I hired someone, for the sum of $1,500, I knew WHAT was going to happen WHEN.

    In light of how much you can skewered for if they file for you, $1500 is nothing in comparison. Try thinking of the IRS as the Ultimate Original Creditor From Hell.
  3. crowmom

    crowmom Well-Known Member

    sorry I took so long to get back to this, but I just wanted to say thank you so much. I guess I won't try to tackle this myself now. Guess I was getting a little full of myself after having some success with credit repair. The IRS is just a tad different than your run-of-the-mill creditor, eh?
  4. leehoch

    leehoch Member

    An alternative to a CPA or tax attorney is an Enrolled Agent. They have passed a rigorous two day exam to qualify for representation in front of the IRS. They are pure tax specialists. They would be less expensive than others. You can find one listed in your area by going to Your situation doesn't sound too complex. But you need to address it immediately.
  5. J. Vick 71

    J. Vick 71 Well-Known Member

    Don't even think about dealing with the IRS like the CRA's. They are above EVERYTHING. This probably won't happen but if it goes down to the worst situation, they can garnish your wages and leave you with only about a $100 a week. IRS is way above 25% garnishment rules which applies to some states in bad situations. Not to mention what they can do to your credit reports. Be nice to the IRS! Work it out there are ways to avoid bad situations. I have never had it really bad with them but have seen it with other people. Just play dumb and stupid and you mean well. Don't play with the IRS. You want to take care of things but you are dumb and stupid, and mean well. They do settle for less overall if you take care of it right.

    I would suggest going to another board and asking this question. Unless someone here can help you out with facts.
  6. aletes

    aletes Well-Known Member

    Just a few suggestions ...

    Figure out how much you owe or are due by completing tax returns for the unfiled years.

    You should always file your taxes, even if you can't pay. In your situation you could have filed ammended the forms later. It is important that you address the situation now before the IRS takes action on its own.

    Once you complete the tax forms and asses how much you owe, you will be able prepare yourself for the next step.

    If you cannot afford to pay the tax you will need to file for an Offer in Compromise (OIC) or an Installment Agreement. If you have no assets and limited income, you could file an OIC yourself. But if you have assets, I would strongly suggest hiring a lawyer to handle the OIC. If you go the Installment Agreement route, I would suggest checking out the IRS website to see how much money they might take a month. If it is bad, you have two choices, lots of research or a lawyer. FYI, you may find this useful, the IRS can base the monthly payment on last years income (previous tax year) or this year -- The default is the income from the previous tax year.

    Here are some IRS links to get you started ...


    Understanding the IRS Collection Process


    Installment Agreement Request

    Intallment Agreement Calculator,,id=13428,00.html




    Collection Financial Standards,,id=96543,00.html

    Collection Information Statement (Financial Statement)


    In order to file for an OIC or an Installment agreement, you will need to file a tax returns for all years. You are liable for tax due for 10 years -- Your states Statute of Limitations does not apply here.

    Once you file your taxes for the previous years, the IRS will asses interest and penalties. Once you know what the total damage is, you need to submit either an OIC or Installment Agreement immediately or the IRS may procede with collection and may even file a tax lien. When you file either of these forms, it will suspend collection activity. Although, penalties or interest will not be suspended.

    If you are due a refund, you can only collect for the last three years.

    If you need to ammend a tax return (1040X), you can only do so for the last 3 years as well.

    The old tax forms are available from the IRS website. Also, previous versions (past years) of TurboTax and Tax Cut are available online.,,id=98339,00.html

    If the tax situation is complex, you are probably best off completing the tax forms yourself and then having them reviewed by a CPA that is experienced in your particular situation. This will save you money because the CPA will need to spend less time reviewing your records and forms.

    My advice in brief ...

    1) Complete Tax Returns for prior years.
    2) Have CPA review tax forms
    3) Send IRS the tax returns
    4) If you owe nothing, great!
    5) If you owe something and can't pay, immediately procede to the next step.
    6) Complete OIC and Installment Agreement forms, so you can better asses which path to take .
    7) As soon as you know how much you owe in interest and penalties, hire a lawyer and have them handle OIC or Installment Agreement. BTW, don't send your completed OIC or Installment Agreement forms to the lawyer -- Just send whatever they request.


    There are many missteps that can be made. Either understand the IRS regulations backwards and forwards or hire a lawyer.

    Your preparation will help reduce your CPA and lawyer costs. It will also help you ask the right questions when interviewing the CPA and lawyer.

    IRS Manual

    IRS Manual - Collecting Process,,id=21028,00.html

    IRS Manual - OIC,,id=21791,00.html

    IRS Manual - Installment Agreement,,id=21806,00.html

    IRS Manual - Approval Process for Notices of Levy, Liens, and Seizures,,id=97252,00.html

    IRS Manual - Withdrawal of Notice of Federal Tax Lien,,id=21937,00.html#ss13

    Freedom of Information Requests to IRS

    Legal Disclaimer: Do not base any of your descissions on this post. This post is only intended to get you pointed in the right direction. Please do your own research and seek legal advice from a qualified professional as I am not a lawyer of CPA.
  7. Butch

    Butch Well-Known Member

    Good job Aletes,

    I only disagree with one minor component of your advice.

    I would NOT file a tax return unless I;

    a) Have the money to send in with it, or;
    b) Will immediately be filing an OIC with which you hope to settle.

    If one files without paying the tax, you're admitting the liability, at which point you may end up in their ACS.

    ACS = Automated Collection System. Known as the Meat Grinder by IRS employees, because that's how it works on people.

    But absolutely don't delay. Wait too long and they might do your tax return for you, in which case it'll be expensive, trust me. Moreover, delaying the filing does accrue additional late filing fees, but done correctly you might get those abated.

  8. aletes

    aletes Well-Known Member

    Thanks for the compliment Butch! Just sharing some hard earned knowledge.

    If you file your returns for the previous years without paying, it will start ACS as Butch says. When you file an OIC or an Installment Agreement (IA), it is "supposed" pause ACS while the IRS makes a determination. It is best to send the OIC or IA at the same time you send your tax returns. Or, at the latest, you would send them immediately after the IRS calculates interest and penalties.

    If you don't file your returns at all and the IRS determines you owe taxes, ACS will typically kick in on its own after 3 years. This can be much sooner if an actual person is looking at your file (instead of a computer).

    Here is a link to one of my posts on another site for those of you with a unpaid tax lien. BTW, I am CD on that site.

    I put some more info on Credit Info Center, but the Forum is down again so I can't put the link here.

    As far as legal representation is concerned, I would suggest selecting a lawyer that was formerly an IRS trial attorney (Office of Chief Counsel or Office of District Councel) -- There are quite a few in private practice.

    Do not have a CPA handle your OIC or IA, there is no attorney client privilege unless you have a lawyer. If things get real ugly with the IRS, a CPA can be compelled to testify -- Your attorney can't.
  9. almostther

    almostther Well-Known Member

    We owed $6K this year and barely had anything to send in. We mailed them a check for $5.00 prior to April 15th, with a letter stating what we'd pay each month. They've been fine with us. Once you set something up with them, there really isn't a horror story. Sounds like you have the money to deal with it, make sure you plan for penalties and interest. It's rather high!

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