1. IRS Audit Representation
Receiving an IRS audit notice can be unsettling. It is important to respond carefully and in a timely manner. IRS audits are formal proceedings and should be handled efficiently and accurately with the assistance of a qualified tax professional.
As an IRS Enrolled Agent, we are authorized to represent taxpayers before the IRS. Once representation is established, all communication and correspondence with the IRS auditor can be directed through our office.
1a. Types of IRS Audits
The IRS conducts three primary types of audits:
Correspondence Audit
Conducted by mail. The IRS requests supporting documentation for specific items reported on your return.
Office Audit
An in-person review at an IRS office, typically focused on selected areas of your return. In many cases, representation can attend on your behalf.
Field Audit
A more comprehensive examination conducted at your home, place of business, or representative’s office. Field audits often involve a broader review of records and, for businesses, may include an on-site visit.
Responding to an Audit
If you are contacted by the IRS, it is important to respond promptly. Timely and accurate responses help protect your rights and ensure the audit process proceeds appropriately.
The IRS expects taxpayers to substantiate deductions and reported items with proper documentation, such as receipts, bank statements, and other records. If documentation is incomplete or unavailable, we can assist in reconstructing records and preparing reasonable support for your position.
Professional Representation Matters
IRS auditors are trained to ask detailed questions about your return. Without preparation, it is possible to provide incomplete or unnecessary information that may broaden the scope of the audit or lead to additional adjustments.
Before communicating directly with the IRS, it is advisable to consult with a qualified tax professional. With proper authorization in place, we can manage communications with the IRS on your behalf and help ensure that responses are structured, accurate, and appropriate.
1b. Professional Representation Matters
IRS auditors are trained to ask detailed questions about your return. Without preparation, it is possible to provide incomplete or unnecessary information that may broaden the scope of the audit or lead to additional adjustments. Before communicating directly with the IRS, it is advisable to consult with a qualified tax professional. With proper authorization in place, we can manage communications with the IRS on your behalf and help ensure that responses are structured, accurate, and appropriate.
1c. Our Professional Representation
You have the right to be represented during an IRS audit or examination. As authorized representatives, we can act on your behalf and manage communications directly with the IRS.
Our services include reviewing correspondence, preparing and submitting supporting documentation, attending meetings, and responding to audit inquiries in a structured and professional manner. Our goal is to ensure that your position is clearly presented and that the process is handled efficiently.
Failure to respond appropriately to an audit—whether intentional or unintentional—can result in adjustments, penalties, and additional tax assessments. Professional representation helps reduce uncertainty and ensures that your rights are preserved throughout the process.
Contact us to discuss your situation and determine the appropriate next steps.
1d. IRS Audit Appeals
If you disagree with the outcome of an IRS audit, you may have the right to appeal. Not all audit findings are final, and adjustments can be reviewed through the IRS appeals process.
We assist clients in evaluating audit results and determining whether an appeal is appropriate. This may include challenging proposed tax assessments, penalties, or specific audit adjustments.
The IRS Office of Appeals operates independently from the examination division and reviews cases with a broader perspective, including the merits of the position and the potential costs of further dispute. In many cases, audit determinations are modified or resolved during the appeals process.
If you have received an unfavorable audit outcome, we can review your situation and advise on the available next steps.
2. IRS Liens and Levies
Owing money to the IRS can feel overwhelming. Taking timely and structured action is essential to reduce uncertainty and prevent further enforcement measures.
We assist individuals and business owners in addressing outstanding IRS tax liabilities and restoring compliance. Our team provides guidance throughout the resolution process, helping you understand your options and move forward with clarity.
2a. IRS Levy
An IRS levy is a legal collection action that allows the IRS to seize assets, including funds from your bank account or wages, to satisfy an outstanding tax debt.
Before issuing a levy, the IRS generally sends multiple notices demanding payment. If the matter remains unresolved, the IRS may freeze and remove funds from your account up to the amount owed or garnish a portion of your wages.
2b. IRS Tax Lien
A federal tax lien is a public record indicating that you owe unpaid taxes to the IRS. It is filed with the appropriate local authority and attaches to your property, including real estate and certain financial assets.
A lien does not mean your property will automatically be seized. Instead, it gives the IRS a legal claim against your property and priority over other creditors in the event of a sale. If the property is sold, proceeds are generally applied first toward satisfying the tax debt before remaining funds are distributed to you.
Tax liens may be filed by both federal and state tax authorities for unpaid income, payroll, or other tax liabilities.
3. IRS Payment Plan
If you do not qualify for an Offer in Compromise, an IRS installment agreement may provide a practical path toward resolving your tax balance over time.
Entering into an IRS payment plan can provide additional time to resolve your outstanding tax balance through structured monthly payments.
While penalties and interest generally continue to accrue until the balance is paid in full, an installment agreement can help prevent further enforcement actions and bring your account into compliance.
Although interest is required by law, penalty relief may be available in certain circumstances. We can review your situation to determine whether you qualify for a reduction or removal of penalties.
3a. IRS Installment Agreements
An IRS installment agreement allows you to resolve your tax debt through structured monthly payments. Once an agreement is approved and you remain in compliance, the IRS generally suspends active collection efforts while payments are being made.
The IRS typically has up to 10 years to collect outstanding tax liabilities. Depending on your circumstances, an installment agreement may remain in place for several years.
Approval is required, and proper preparation is essential. We assist clients in submitting accurate financial information and negotiating terms that reflect their financial capacity.
3b. How Monthly Payments Are Determined
The IRS evaluates several factors when determining payment terms, including:
- Your income
- Your assets
- The total amount owed
- Actual living expenses
- IRS-allowed expense standards
- The remaining collection statute of limitations
- Whether full repayment is feasible within the collection period
3c. Important Considerations
An installment agreement is a binding arrangement. Payments must be made on time each month. Missing payments can place the agreement in default and may result in renewed collection activity.
Professional guidance can help ensure the agreement is structured appropriately and remains sustainable over time.
4. Offer in Compromise
Unable to pay your IRS tax debt? Let’s discuss your resolution options.
In certain circumstances, the IRS may allow taxpayers to settle their tax debt for less than the full amount owed through an Offer in Compromise (OIC).
This program is available to individuals who can demonstrate that they are unable to pay their full tax liability or that there is a legitimate dispute regarding the assessed amount. Eligibility is based on strict financial and legal criteria, and approval is not guaranteed.
We can review your situation to determine whether an Offer in Compromise may be a viable option and guide you through the application process if appropriate.
In certain circumstances, it may be possible to resolve your tax liability for less than the full amount owed, including assessed penalties and interest. Each case is evaluated individually based on financial condition and the IRS’s determination of reasonable collection potential.
There is no fixed minimum settlement amount established by the IRS. Acceptance depends on whether the offer reflects what the IRS believes it can reasonably collect based on your financial situation and supporting documentation.
The IRS Code states: “We will accept an Offer in Compromise when it is unlikely that we can collect the full amount owed and the amount you offer reasonably reflects the collection potential…” (Internal Revenue Code section 7122).
4a. Offer in Compromise
In certain cases, an Offer in Compromise may allow you to resolve your tax debt for less than the full amount owed. The key is determining whether your financial situation supports a settlement based on the IRS’s calculation of reasonable collection potential.
We assist clients by carefully evaluating their income, assets, and allowable expenses to determine whether submitting an offer is appropriate. If suitable, we guide you through the preparation and submission process, ensuring that all required financial documentation is complete and accurate.
4b. Important Considerations
Before submitting an Offer in Compromise, all required tax returns must be filed and you must meet IRS compliance requirements. A payment is generally required with the application. Settlement options may include a lump sum payment or periodic payments over time, depending on eligibility and IRS approval.
Many Offers in Compromise are returned or rejected due to incomplete documentation or errors. Careful preparation and proper financial analysis are critical to increasing the likelihood that an offer will be processed and seriously considered.
Contact us to determine whether an Offer in Compromise may be appropriate for your situation.
5. Innocent Spouse / Injured Spouse Relief
Marriage can have significant tax implications, particularly if one spouse has unresolved tax issues.
5a. Innocent Spouse Relief
In certain circumstances, a taxpayer may request relief from joint tax liability if the tax debt resulted from errors, omissions, or improper actions by a spouse or former spouse.
The Innocent Spouse Relief provisions were created to address situations where it would be unfair to hold one spouse responsible for taxes attributable to the other. Eligibility depends on specific legal criteria and a careful review of the facts.
We can evaluate your situation and advise whether requesting Innocent Spouse Relief may be appropriate.
5b. Types of Innocent Spouse Relief
When a married couple files a joint tax return, each spouse is generally subject to joint and several liability. This means both spouses are legally responsible for the full amount of tax, interest, and penalties owed on that return — even if one spouse earned all the income or improperly reported items.
This joint responsibility can continue after divorce. A divorce decree assigning tax liability to one spouse does not automatically relieve the other spouse of responsibility in the eyes of the IRS.
However, in certain circumstances, a spouse may qualify for relief from some or all of the joint liability. If relief is granted, the qualifying spouse may be relieved of tax, interest, and penalties attributable to the other spouse’s actions. Any portion that does not qualify for relief remains the responsibility of the requesting spouse.
The IRS Provides Three Types of Relief:
- Innocent Spouse Relief
- Separation of Liability Relief
- Equitable Relief
Each form of relief has specific eligibility requirements based on the facts and circumstances of the case.
If you believe you may qualify, we can evaluate your situation and guide you through the application process.
5c. Injured Spouse Relief
Injured Spouse Relief applies in a different situation. If the IRS offsets a joint tax refund to pay a past-due debt owed solely by your spouse — such as child support, spousal support, or federal or state taxes — you may be entitled to recover your portion of the refund.
An injured spouse request may be appropriate if:
- You are not legally responsible for the past-due debt, and
- You reported income, had taxes withheld, made estimated payments, or claimed refundable credits on the joint return.
Properly preparing and filing an Injured Spouse Allocation can be complex. We can assist in determining eligibility and submitting the necessary documentation.
6. Penalty Abatement and Removal
The IRS generally imposes penalties when a taxpayer files a return late or fails to pay the amount owed by the due date.
In many cases, taxpayers may qualify for penalty relief if they can demonstrate reasonable cause for failing to comply with filing or payment requirements.
Each situation is evaluated individually based on the specific facts and circumstances. We can review your case to determine whether you exercised ordinary business care and prudence but were nevertheless unable to meet your tax obligations, and whether a request for penalty abatement may be appropriate.
6a. Common IRS Penalties
The IRS may assess penalties when tax returns are filed late, taxes are paid late, or errors appear on a return. Some of the most common penalties include:
Penalty for Failure to File
5% of the amount of unpaid tax per month (or partial month) the return is late, up to a maximum of 25%. A minimum penalty of $135 may apply for returns over 60 days late. The minimum penalty is the lesser of $135 or 100% of the tax due on the return.
Penalty for Failure to Pay
The failure-to-pay penalty is generally 0.5% per month of your unpaid taxes. It applies for each month or part of a month your taxes remain unpaid and start accruing the day after taxes are due. It can build up to as much as 25% of your unpaid taxes.
If you file your federal tax return late and owe tax with the return, both penalties may apply.
6b. Accuracy-Related & Refund Claim Penalties
A penalty may also apply if an erroneous claim for a refund or credit is filed. The penalty is equal to 20% of the underpayment, unless the taxpayer adequately discloses a reasonable basis for the treatment of the item in question or the position is supported by substantial authority.
6c. Penalty Relief Options
Several penalty relief options may be available, depending on the circumstances:
First-Time Penalty Abatement
A commonly used relief provision that may be available to taxpayers with a history of compliance. While qualification requirements are generally straightforward, it is considered a one-time opportunity and should be evaluated carefully.
Reasonable Cause Penalty Abatement
Penalty relief may be available when the taxpayer can demonstrate reasonable cause, such as fire, casualty, natural disaster, inability to obtain records, death, serious illness, incapacitation, or other significant circumstances.
Statutory Exception Relief
In certain cases, penalties may be removed when a taxpayer reasonably relied on erroneous written advice provided by the IRS.
6d. Professional Guidance
There are situations in which penalties and related interest exposure may be reduced or minimized. We assist clients in evaluating eligibility, preparing documentation, and navigating the procedural requirements necessary to request penalty abatement.
Professional guidance can help ensure that your request is presented clearly and in accordance with IRS standards.
