In this post, I want to lay out for you the five key phases of WATAX handling an IRS tax problem case:
1. Research - Almost every new client has their IRS record researched. In that research - we determine - a. what years are unfiled and whether the IRS created balances for the client by filing for them. b. where our client stands in the IRS collection process. c. what our client owes the IRS and when their older tax years might be expiring. d. we order all of the transcripts to complete our clients unfiled tax returns.
2. Analysis -- After researching the IRS record - we make key decisions about - a. what years need to be filed by the client. b. whether clients needs to replace IRS returns or whether we should let them stand. c. whether we plan to go for an Offer in Compromise, payment plan or uncollectible status. While we likely NOT know the result at that time - we will know whether we are going to try to pursue one of those outcomes. We usually will speak to the client about the results of the research and our analysis of their situation within 48 hours of being hired.
3. Representation -- Within 48 hours of being hired, we are going to post our Power of Attorney announcing ourselves as our client's representative with the IRS or State. If our client is in collections or has a Revenue Officer - we are going to call them and make sure the collection process is on hold. IRS representation means we are going to be monitoring your tax case -- UNTIL it is finished - managing all the deadlines and making all of the communication on your tax case to the IRS.
4. Tax Preparation -- Unfiled returns can be completed by our tax preparation department OR for people with limited resources for tax preparation fees - an email is sent to them with a complete breakdown of all of the income and other items reported to the IRS on their behalf. In that email - we indicate to the client what forms they should print out with some brief instructions. Naturally - we would prefer that our client hires us for tax preparation: we prepare both Federal and State returns.
5. Resolution of Tax Problem -- Once we determine what you owe the IRS or State - after all of the returns are prepared, WATAX resolves your tax problem. For the most common tax problem, we are going to file an Offer in Compromise, installment agreement or uncollectible status. If we are going to set up a client in an installment agreement we are always going to pursue a penalty abatement later on.