How to Beat the IRS

Lance Wallach

Beware of someone whose fee is based on a percentage of how much you save in taxes. Or who promises to get you a significantly higher refund than anyone else can. People like these are likely to prepare outrageous returns that will land you deep in trouble with the IRS.

Just because the IRS says you owe money doesn’t mean that’s correct. The agency makes mistakes - plenty of them, even computing penalties and interest.

Having a smart, well-prepared tax expert on your side can be a tremendous advantage. Not only will they know the ins and outs of the tax code, but also they can take over the often-exhausting job of dealing with the IRS – and help you decide how far to push the fight.

If you feel you have a bulletproof case but are getting nowhere with an auditor, stay calm – and consider asking to speak to that person’s manager. If that doesn’t help either, consider taking your case to an IRS appeals office. An IRS publication says, “most differences” between taxpayers and the IRS that reach the appeals level are settled. For details see IRS publication 556.

You may also consider taking your case to the IRS Taxpayer Advocate Service, or TAS, an organization within the IRS created to help taxpayers resolve problems, as well as advocate for changes within the system.

You may be eligible for help if you have tried to resolve your tax problems through normal IRS channels and haven’t gotten anywhere, or if you believe an IRS procedure isn’t working as it should, such as an amended return that hasn’t been processed, as advocate spokesperson says.

If you are facing a financial crisis and have no hope of repaying everything you owe, consider asking the IRS to settle for some lesser amount.

Specifically, IRS employees “will be permitted to consider a taxpayer’s current income and potential for future income when negotiating an offer in compromise,” the IRS said. “Normally, the standard practice is to judge earnings in prior years.”


Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters. He writes about 412(i), 419, and captive insurance plans. He speaks at more than ten conventions annually, writes for over fifty publications, is quoted regularly in the press and has been featured on television and radio financial talk shows including NBC, National Pubic Radio's All Things Considered, and others. Lance has written numerous books including Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and Sons, Bisk Education's CPA's Guide to Life Insurance and Federal Estate and Gift Taxation, as well as AICPA best-selling books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots. He does expert witness testimony and has never lost a case. Contact him at 516.938.5007, Email wallachinc@gmail.com or visit www.taxaudit419.com/TaxHelp.html and www.taxlibrary.us

The information provided herein is not intended as legal, accounting, financial or any other type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.