Frequently Asked Questions: Should I negotiate with the IRS on my Own?

January 31, 2019

Radio and TV ads by tax resolution companies tell you the IRS is the largest and best collection agency in the world. They talk about IRS programs for assisting taxpayers who have fallen behind in filling tax returns, paying tax—or both—and they always say, “don’t do this on your own.”

However, many people still wonder: is it possible to work with the IRS directly and get a satisfactory resolution? It’s worth your time to consider some of the pros and cons of working with the IRS directly versus hiring professional IRS Dispute Resolution and Collections assistance.

The pros of working with the IRS directly:

  1. You know what’s going on every step of the way.
    If you’re opening all correspondence from the IRS, which everyone should do, and keeping in regular contact with them, you are in the best position to know what is being discussed and to provide the information needed to resolve your case.
  2. Better use of available cash to reduce a tax liability.
    Instead of paying a company to represent you, you can use that same money to pay off part, maybe all, of your tax liability.
  3. You may be able to get your tax situation resolved faster than you would if you hired representation.
    This is especially true if your situation is straightforward. Hiring professional representation will require more time in the process to allow your representatives the ability to get the necessary information about your case, which could increase costs determined by time.
  4. You can talk directly to negotiate a deal with the IRS.There are people who manage to negotiate “the deal of a lifetime” with the IRS. They get the IRS to drop all the penalties and some or all of the interest, and they can also name their price on an installment agreement. This is, however, the exception, not the rule, and is usually achieved when the IRS can easily determine additional collection efforts would produce no additional payments.

What happens if you work with the IRS and suddenly can’t get a hold of your revenue officer? We answer this and other common questions in our series on IRS controversy.

The cons of working with the IRS directly:

  1. Time.
    As of 2019, it has been reported that the average hold time when calling the ACS for Businesses (ACS) is 70 minutes, assuming the call doesn’t get dropped. Add in the time spent calling back and talking with the representative, and it works out to an average of 108 minutes per call. Sitting on hold with the IRS requires taking time away from your business of generating income.

    The IRS sends a lot of correspondence regarding delinquent taxes. These letters include deadlines and hearing dates, and they outline what the IRS needs to complete the collection or information gathering process. Documents must be collected, filled out, and submitted on time. Hearings need to be attended. Do you have the time to handle all aspects of negotiation with the IRS, or is hiring someone to assist your efforts a better use of resources?
  2. Deadlines.
    When deadlines are missed, the IRS will increase their collections efforts. They may levy your business’s accounts receivables or bank account. For individuals, the IRS may garnish income or levy bank accounts. It can take weeks or months to get everything caught up financially after a levy, which prevents you from having the ability to address the tax liability. It may also prevent you from paying current taxes, which can exacerbate the overall tax problem. The longer a tax liability is not in a formalized IRS payment agreement, the more penalties and interest can accrue. Any payments made outside of a formalized agreement are applied to the oldest penalties and interest instead of the actual taxes.
  3. Expertise.
    If you had a major plumbing issue, you would call a plumber to fix it. If were diagnosed with cancer, you would consult an oncologist. The knowledge of an experienced professional is a valuable asset when facing unfamiliar circumstances. A tax liability is no exception. It can be difficult to make sense of the notices the IRS sends, to figure out exactly how much is owed or to know how to complete the paperwork. While there are a lucky few individuals who jump right in and have instant success negotiating with the IRS, most individuals and business owners find themselves at the mercy of the IRS’s demands, unable to get the results they desire.

    A knowledgeable professional is well-acquainted with the development of installment agreements and the Collections Due Process procedures required for navigating the collections and appeals divisions. Their expertise can mean the difference between an excellent resolution or an unsatisfactory one.
  4. Peace of Mind.
    An experienced professional takes the burden off your shoulders, which helps you sleep at night. Your desk is no longer covered in unopened letters from the IRS and that uneasy feeling in your stomach is gone. You’ve stopped holding your breath anytime you check the balance of your bank account. That fear of the IRS showing up at your business or home no longer preoccupies you. When the HR manager rings your phone at work, you no longer assume it is because your check is being garnished.

It helps to have someone actively working to resolve your tax liability. You’ve provided the requested documents and they can simply call you regularly to provide progress updates. Peace of mind is perhaps the greatest benefit to hiring professional tax representation.

What Should You Do?
How do you know if you need help dealing with the IRS? Ask someone who will give you an honest, unemotional response. It’s a good idea to consult with a tax professional, just as you would with a plumber if your faucet springs a leak. Each tax case is unique and has a variety of factors that play into how best to address an IRS collection matter.

Consult the Professionals
To help you better weigh the pros and cons of your particular case, our IRS Dispute Resolutions and Collections team offers a free initial consultation, which provides:

  1. A comprehensive assessment of where you are in the collections process.
  2. An outline of available options.
  3. A path to resolution that is best for your situation.

From simple fixes to complex audit appeals representation, our experienced team offers answers, solutions, and peace of mind.

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