The IRS may notify you of an audit, tax dispute or collection action. These issues, if not resolved quickly, can lead to serious complications and financial risks.
It is important to understand why you may need to defend against the IRS’s allegations and whether self-representation is the right choice. Here is what you should know:
Why the IRS may be after you
The IRS can enforce certain tax laws to examine tax issues or possible attempts of criminal activity. There are a few common reasons the IRS may contact you, including:
- Audit: The IRS may contact you because there was an issue or questions about a tax return. The IRS may request additional evidence to examine the issue.
- Dispute: The IRS may be responding to a dispute you filed against the amount of taxes owed or another issue.
- Collections: The IRS may be seeking to collect on unpaid taxes, which could lead to the risk of imposed liens, bank account levies or wage garnishments.
- Criminal investigations: The IRS may be investigating allegations of criminal activity, such as tax evasion or fraud.
Failing to take action could lead to larger issues. It is often crucial to approach each issue with care and understanding of your legal options.
The risks of self-representation
You have several legal rights as a taxpayer when responding to any issues brought by the IRS. For example, you have the right to have a clear explanation about any IRS procedures and laws and the right to dispute the IRS’s actions.
You can represent yourself when challenging the IRS – but it is seldom the best way to go. Self-representation against the IRS may seem cheapest and easiest. However, several issues can arise through self-representation. Laypeople rarely have a clear, comprehensive understanding of tax laws and missing deadlines or failing to collect the correct paperwork can be hugely problematic. If an audit is unfavorable, you could end up agreeing to a settlement that is inappropriate for your situation. Formal representation, in essence, protects you from dangers in a legal landscape that is Byzantine, at best.
When it comes to protecting your financial future, it may be wise to reach out for guidance to learn more about your legal rights and defend yourself from serious consequences.
