IRS REPRESENTATION


Dana S. Beane & Company, P.C. for over 50 years has been battling the IRS for our clients. For an interesting story about where our passion came from see our founders short form biography.

In general, the IRS only audit businesses, their owners and estates. If you are not in the top 5% of incomes, you don't have much to worry about. For the rest of you, big brother is waiting and watching.



Our Recommendations

 

Our experience in assisting clients includes extensive tax court petitions and trials.


If you are audited - Here are our recommendations:

1. Number one biggest mistake, representing oneself.

2. Be prepared - The IRS is not a mystery, depending upon your fact pattern it is normally very clear exactly why they are auditing you. If it is not clear to you, have a taxation expert review your returns and inform you of the red flags it contains. Prepare, prepare and prepare.

3. If you are a business, read the IRS's industry audit guide line manuals, its likely the examiner you will be deal with knows them, accordingly, you should to.
 


4. Treat your examiner with the same courtesy you would like others to treat you. There is nothing worse than an angry examiner.

5. The government is a very big place and some times you will come across an examiner who does not know the rules. For example, he or she should always advise you that you have a right to representation. Our advise is simple; tell the examiner you would like a CPA, Attorney or Enrolled Agent to represent you!

6. In our firm, IRS notices are wrong nine times out of ten. Don't assume the IRS is right! It can be very costly to get your money back.
 

Who can represent me in front of the IRS:

In general, other than oneself, only attorneys, CPAs and Enrolled Agents are permitted under IRS rule to represent taxpayers in IRS proceedings. However, an exception is made for the taxpayer's immediate family comprised of ones spouse, parent, child, brother or sister. Grand children are excluded. The IRS strictly, like everything else, enforces these rules.

Form 2848 (PDF 51KB) - Power of Attorney is utilized by the IRS. In general, it is a power that permits the designated representative to act on behalf of the taxpayer. It is not a power to conduct your affairs, just tax business.

Form 8821 (PDF 45KB) - Tax Information Authorization is an alternative to a POA wherein the taxpayer authorizes the IRS to release confidential information to the representative only.

To revoke these powers simply mail the IRS offices in which you deal a copy of the original Form with the word "REVOKED" at the top with your signature and date.

Taxpayers can recover certain costs from the IRS

Providing the follow are satisfied, IRC Section 7430 permits an award of fees and costs:

  1. Fees must have been incurred with determination, collection or refund of tax, interest, or penalty.
  2. Taxpayer must have exhausted all administrative remedies with the IRS.
  3. Taxpayer must not have unreasonable extended proceedings.
  4. The IRS must not have been substantially justified and the taxpayer must have substantially won the issues.
  5. Taxpayer's net worth must be under 2 million, 4 million if married. For business their net worth must be under 7 million and less than 500 employees.

Notation - Beginning after January 19, 1999 the taxpayer can receive cost reimbursement if he or she wins at the Appeals Office conference level. However, cost incurred in "no change" audits are not recoverable because their is no tax due determination made.


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