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Many clients often have a common misconception regarding the IRS and certain tax representation companies. Both parties are equally responsible for instilling fear in taxpayers.
However, such fear-mongering practices by the IRS are actually quite rare. The instances where I have observed the IRS taking action in this manner are typically limited to cases where the taxpayer adopts a tax protestor stance in relation to their tax responsibilities.
It is crucial to have legal representation to protect yourself from falling victim to these fear-inducing tactics employed by certain individuals within the IRS. While the IRS does possess the authority to seize your home, it is generally possible to avoid such a situation.
Revenue agents and revenue officers are both IRS employees with distinct responsibilities. Revenue agents conduct audits, ensuring tax compliance through the examination of financial records.
Revenue officers focus on collecting past-due taxes and assisting delinquent taxpayers in filing overdue returns. Both have the authority to issue summons to obtain necessary information.
Both revenue agents and revenue officers frequently utilize summons as a means to compel meetings with taxpayers and access relevant documents necessary for their work. Under 26 U.S.C. S 7602, the IRS is granted the authority to examine books, and records, and interview responsible individuals regarding tax liability.
As long as the IRS acts in good faith (which requires minimal proof), they are permitted to exercise this power. It is then the taxpayer's responsibility to demonstrate an abuse of process to prevent the enforcement of a summons, which carries a substantial burden.
In the context of the IRS, a lien does not involve the actual seizure of property; rather, it is a public filing that notifies other creditors of the government's legal claim to your property. The lien serves to safeguard the government's interest in all of your property.
On the other hand, a levy occurs when the IRS takes tangible action to seize property. This can manifest as wage garnishments, bank levies, or the physical seizure of assets.
A law firm is owned by a lawyer(s) and operates under the regulations established by the state bar where it is located. This obligates the law firm to adhere to ethical practices outlined in the rules of professional conduct. In contrast, a tax representation company operates in a more ambiguous space. These companies often emphasize that they are not law or CPA firms to avoid being bound by the state's rules of professional conduct for attorneys and CPAs.
While both can provide representation before the IRS, only a law firm is required to follow the rules of professional conduct. It is important to carefully consider this information, particularly as a simple Google search reveals numerous issues taxpayers have encountered with tax representation companies.
The timeframe for preparing and reviewing an offer to the IRS depends on various factors such as the tax liability amount, required documentation, and the need for an appeal.
Typically, an offer can be prepared and reviewed by the IRS within approximately 7 months. However, if an appeal is required, the process may take longer.
It is crucial to exercise caution when considering a company that makes grand promises without providing sufficient information about your specific case. You may have been speaking with a salesperson rather than the individual who would handle your case.
It is only after a thorough assessment of your circumstances that a determination can be made regarding your potential for settlement. Take the time to carefully evaluate and consider your options before making any decisions.
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