Patricia L. Gentile, CPA, Attorney at Law
6 Courthouse Lane, Unit 10, Chelmsford, MA 01824, (978) 454-1145
 

Here are some questions to ask a prospective Tax Professional to find out whether they can provide the level of service you need.

How much experience do you have? Look for a pro with at least three to five years experience dealing with IRS in the areas of audit, appeals and collections work. When searching for a tax preparer, look for one with experience preparing returns for your particular business, job or profession. And always look for a full-time professional, not merely a part-timer preparer.

What percentage of your tax preparation clients get audited? If more than 2 percent of one’s clients get audited, that may indicate a problem in the pro’s tax preparation practices. If the ratio is much higher, you might ask whether the pro was ever the subject of an IRS examination into his preparation practices.

What is Form 8275 and should it be filed with my tax return? Form 8275, Disclosure Statement, is the audit-proof form. It allows you to provide information with your tax return that answers questions in the return. This way, your return is both audit-proofed and penalty-proofed. 

If I lost records for an expense, can I still claim the deduction? Yes. You have the right to reconstruct lost records and claim the deduction. In fact, the law actually requires reconstruction in some cases. 

How do affidavits help audit-proof a tax return? Affidavits are sworn statements providing information on issues for which there is no receipt, such as business miles or a home office. Notarized statements provide “testimony” on deductions that help solidify your claim. 

Can I get an extension of time to pay taxes if I can’t pay by April 15? Yes. IRS Form 1127, Application for Extension of Time to Pay, can get you up to six additional months to pay, without penalties (though interest accrues). 

What is the best way to prevent a wage or bank levy? Form 9465, Installment Agreement Request, can establish either an installment agreement or uncollectible status, both of which eliminate the potential for levies.

Can federal or State income taxes ever be discharged in bankruptcy?  Yes. The ability to discharge tax debts is dependent upon their age, your equity in assets and certain other “timing” elements.

How can an Offer in Compromise help my problem?  The OIC is a means of negotiating a reduction of your tax bill. Most tax pros do not realize that there are three different variations of the OIC. The best one for you depends on the facts of your case.

Is there a means to get emergency relief if IRS action is causing hardship?  Yes. The Taxpayer Advocate Service can order the IRS (or State, if applicable) to stop action that is or will cause “significant hardship.”