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Is it "better" to deal with a collection agent or pay a tax…

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Second opinion] Is it...

Second opinion] Is it "better" to deal with a collection agent or pay a tax service to deal with them on your behalf?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I owe approx $49K from 2008-2015. I have an installment agreement and I am current.I received a demand letter for 2016 for $6700. This will put me over the $50k mark. I realize that the installment agreement is now void due to the $6700. non-payment.

Accountant's Assistant: Is there anything else the Accountant should be aware of?

If I receive a lien, then I"ll probably lose my ability to continue my line of work. I have considered an OIC, however, I have talked to two tax firms that want $3000 to $6000 to assist in the filing. Another firm wants $2500 to call the IRS to try to renegotiate the installment agreement suggesting that both the OIC and installment agreement will come with a lien.I think I'm pretty much screwed either way.

Submitted: 7 months ago.Category: Tax
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12/6/2017
Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,610
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
Verified

Hello, my name is ***** ***** I will be able to provide you with another opinion.

In my opinion, if you can find the right federally licensed Enrolled Agent then you are far better off hiring representation.

___

This is especially true given the scenario that you have outlined above.

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An Enrolled Agent will help you decide which course of action would be most appropriate to possible avoid a lien or if a lien is necessary, you may be able to have the lien removed if you make three or more agreed payments on time.

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My suggestion for the first step, is to review the demand letter and your 2016 tax return. The IRS does sometimes error in the amount assessed.

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

You are able to reply to the demand letter with an explanation of your tax position.

At that point the IRS will review your information along with their records and respond to your reply.

___

This process will most likely take a few months. In this time, I would recommend paying as much as possible towards the $6,700 and remain in compliance with your previous payment agreements

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

If the IRS still insists you owe the $6,700 you are able to appeal their decision.

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

Most importantly you first need factually determine if you do owe the $6,700 and if and when you could pay the $6,700.

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

Any firm or Enrolled Agent will want to review your entire situation so that they are able to competently assist you.

Reviewing your total financial situation does take a tremendous amount of time.

If you did decide to work with a Firm or Enrolled Agent, it is best to receive an engagement letter which details which tax periods will be handled and the total scope of your professional relationship.

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

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A positive rating of five stars is always appreciated.

Thank you!

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

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Regards,

Chad CFP ® professional

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

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