Tax representation is becoming like the condiments aisle at your local grocery store.
There are too many choices and no way to tell what’s best.
Here are 10 do’s and don’ts to follow before hiring someone to represent you before the IRS:
- Do ask for a free consultation — You should not be required to pay anything to a tax lawyer or CPA just to find out whether you need to hire him or not. The initial consultation benefits the lawyer as much as it does the potential client.
- Don’t hire anyone who tries to scare you into “acting now” — We have heard of many cases where the would-be tax representative told a potential client that he or she could go to jail if they didn’t hire them immediately. This is immoral. A good tax representative will make you feel less anxiety about your stressful IRS problems. It is extremely rare for the IRS to pursue criminal charges against everyday taxpayers.
- Don’t hire anyone who uses sales gimmicks to try to get you to hire him — Remember, you aren’t buying a used car or cheap furniture and you shouldn’t be treated as if you were. You want to hire a serious professional to handle this critically important matter for you, not “Dan’s Discount House of Holy Worship.”
- Do hire a lawyer — Many CPAs and IRS enrolled agents are experienced and competent in the area of IRS disputes, but only statements you make to a lawyer are protected from disclosure under the attorney-client privilege. Non-lawyers can be forced to disclose in a hearing or trial everything you tell them.
- Don’t hire someone whose advertisements or promotional materials offer “pennies on the dollar” IRS settlements — This is a scam. These individuals are trying to manipulate you by telling you what you want to hear, not what you need to hear. It is preposterous that any honest tax professional would or could tell you what she could do for you without first analyzing your case.
- Don’t hire anyone who sends you an unsolicited letter in the mail after you’ve been served with an IRS lien — These people scour the newspapers and public records looking for anyone who has had a tax lien filed against them. Then they send mass mailings to them offering — you guessed it — “pennies on the dollar” settlements.
- Do contact the local bar association to find out if the representative has been sanctioned for misconduct — This is another reason to hire a lawyer/CPA. Non-lawyers and non-CPAs are not regulated and, therefore, it is impossible for you to find out their disciplinary history.
- Do ask detailed questions about the representative’s background and experience — You have a right to know everything about a potential tax advisor before you give them any money. (See No. 1) Ask the representative the following questions: a. Have you ever tried a case in United States Tax Court? If the answer is no, it tells you that if your tax dispute doesn’t get resolved at the administrative level you will have to hire another representative to take the matter to court. b. Can the IRS or the Courts make you disclose what I say to you? Only a tax lawyer can say “no” to this question. (See No. 4) c. Have you ever been reprimanded or sanctioned by any state bar association or department of professional regulation? You can check this out yourself, but it’s a good idea to ask the potential representative to gauge his reaction. If he gets defensive, you’ve got your answer.
- Do ask to meet with the person who will be working on your case — The person you have the initial consultation with may be an attorney, but the person she delegates the work to might not be. There is nothing wrong with a lawyer who has non-lawyers assist him or her in handling case files, but you have the right to meet those people.
- Don’t hire the first person you speak with unless you are certain it is the right person for you — Tax matters are simply too important for you to hire the first person you speak with merely because it’s more work to speak with several candidates. It’s a good idea to get a second opinion.
Peter Pappas is a tax attorney and Certified Public Accountant. He and his Baldwin Park firm, The Pappas Group, have been assisting federal and state taxpayers for more than 25 years. Call Peter at 407-648-2555, email him at ppappas@pappaslaw.com or visit pappastax.com