Don’t Be Afraid to Challenge the IRS – Resources & Tips

I just got back from the New England IRS Representation conference where we were platinum sponsors and exhibitors. It was held at the Foxwoods resort in Connecticut. There were several high profile speakers from the IRS’s Small Business/Self Employed division as well as from Appeals, Exam, OPR and Department of Justice Tax Division.

Although nearly all of the information was very valuable to practitioners who represent clients before the IRS, one of the presenters, from IRS, gave out very wrong information concerning the assessment of the Trust Fund Penalty against single member LLCs. I won’t go in to all the details here and it was eventually corrected by another presenter, however this is a big deal as many of us have single member LLC payroll tax cases underway right now that we are trying to resolve.

The point is this: If the people in charge at the IRS are confused and don’t know what their own laws, rules and (internal revenue manual) regulations say imagine how the rank and file are answering and dealing with yours and your clients questions about their payroll tax collection issues?

Don’t be afraid of challenging the IRS when you KNOW they are in the wrong and you are right.  Simply (and politely) fax them the IRM section(s) that supports your defense. If you can’t get anywhere with the revenue office escalate the matter to their manager. We just want them to follow their own laws and guidelines. This is another reason that troubled taxpayers need our expert representation now more than ever.

There are many great resources available today to get technical training on these types of issues. The American Society of Tax Problem Solvers (www.astps.org) provides top notch training and boot camp seminars on these and other technically related issues.

When Karen Hawkins, former IRS Director of the Office of Professional Responsibility (OPR) spoke at the event she cited the two main areas of concern regarding  complaints made toward practitioners: They were (the lack of) client communications and client management. This should be of utmost concern to CPAs, attorneys and EAs who don’t have a formal system in place to communicate with their clients during the course of their representation. OPR has the power and authority to suspend and/or disbar practitioners from practice for IRS Circular 230 violations. Not communicating with your client is considered a violation.

As we all know, the IRS is taking longer and longer to resolve cases due to budget cuts and reduced headcount. It is not unusual that cases that used to take several months to resolve now are taking upwards of a year or much longer! That is why you need a formal system in place that runs on auto-pilot that tells you when and how to communicate with your clients, especially during times when you are in a “holding pattern” with IRS and absolutely nothing is going on with your client’s matter. Put yourself in your client’s shoes – How would you feel if you’ve paid someone thousands of dollars and you don’t hear “peep” from them for a prolonged period of time? No one likes to be ignored. Besides filing a complaint with OPR your client can also complain to various other offline (State Board of Accountancy, State Bar, and State attorney General) and online venues.

For more information and a checklist on the “14 Touch-Point” client assurance system visit: http://rozstrategies.com/blog/14-touch-point-client-control-management-checklist/