Tax settlement firms claim that they can reduce or even eliminate what you owe to the IRS. An attorney can represent clients before the IRS in audits, collections and appeals, but so can a CPA. The big difference in this case, and one that you should keep in mind, is that a tax lawyer can grant attorney-client privilege, which means that your tax lawyer is exempt from being required to testify against you in a court of law. Tax lawyers are more familiar with different tax settlement programs than most certified public accountants and know how to select the best program for your case and how to make you qualify for that program.
For example, your tax matter abroad is likely to have tax consequences in the United States and in the foreign country involved. You should find and hire a good tax lawyer as soon as possible because if you suspect that you may need one, you probably need one. Foreign tax issues have many complexities that IRS lawyers can explain to you, but they probably won't be obvious at first glance. However, the IRS will not record in the CAF system future tax years or periods listed that exceed 3 years starting on December 31 of the year in which the IRS receives the power of attorney.
Both government organizations administer the income tax code; the IRS handles federal taxes and the Franchise Tax Board deals with California state taxes. Tell the tax settlement company, which steps in and leaves the worried customer amazing messages that say that their tax liability is miraculously reduced by hundreds or thousands of dollars. The original power of attorney outside the IRS provides authority to deal with federal tax matters (for example, general authority to perform any act). Tax settlement firms use a procedure accepted by the IRS known as a compromise offer to reduce their customers' tax bills.
A tax lawyer has the experience needed to achieve a tax settlement, not something that the person on the street does every day. Starting where the need is least acute, the following circumstances would be a good starting point for enlisting the help of a tax lawyer. However, if they had filed previous powers of attorney, the filing of this current power of attorney would revoke any previous power of attorney for the same tax matters, unless they checked the box on line 6 and attached a copy of the previous power of attorney that they wanted to remain in force. Then, you must mail or fax a copy of the power of attorney with the revocation annotation to the IRS, using the where to file the request box in the instructions on Form 2848 or, if the power of attorney is for a specific matter, to the IRS office dealing with the matter.
A recognized representative can replace or delegate authority under the power of attorney to another recognized representative only if you specifically authorize the act under the power of attorney. Tax laws and codes, whether at the state or federal level, are too complicated for most laypeople and change too often for many tax professionals to keep up with them. If the IRS or FTB ignore your letters, a tax lawyer can write a letter that grabs your attention.
