Dealing with the Internal Revenue Service (IRS) can be scary and confusing, and to get through the process, you may want to hire IRS representation. Wondering if you need representation? Here are five signs you should consider calling someone.
1. You Don't Understand the Tax Issue in Question
Typically, IRS issues start with the agency contacting you through the mail. The letter may request more information to back up certain claims on your tax return, or it may alert you that the agency has changed a number on a tax return. In either case, if you don't understand what is happening, you should contact someone about IRS representation.
2. You Disagree With a Tax Assessment.
As indicated above, the IRS sometimes changes information on the taxpayer's returns. To give you an example, imagine that you report $40,000 in income, but the IRS sends you a letter stating that the agency received a record from an employer saying that you earned an extra $5,000.
Based on that info, the agency is increasing your reported income to $45,000.However, you are not aware of these earnings and you disagree with the agency's new assessment. Having representation can help you address this issue.
3. The IRS Is Threatening to Levy Your Assets
If you owe money to the IRS, the agency has the right to use a variety of collection techniques and that can include levying your assets. For instance, the agency may seize your bank account, garnish your wages, or try to take other assets. If you receive a notice that this may happen, you should contact someone who can represent your interests in front of the IRS.
4. The IRS Is Threatening to Suspend Your Passport
In cases where you owe a substantial amount of money, the IRS can effectively take your passport. Technically, the agency doesn't take your passport. It just starts the process and alerts the State Department to put a hold on your documents. If you need to travel for work or simply don't want to be without a passport, you should also talk to a representative if you are in this situation.
5. You Have to Go To Tax Court
Eventually, some tax issues go all the way to tax court. Generally, this happens if there is a sustained disagreement between the agency and the taxpayer. You never want to represent yourself in tax court. You always need a professional in this situation.