Taking Care of the Client

I spend quite a bit of time reading tax blogs and forums.  They are a great source of information and discourse, as well as entertainment.  The one thing I see frequently that I feel needs commenting on is an aversion by some tax preparers to "put their license at risk" for the sake of their clients.  While I agree that you should not do anything illegal or dishonest, I feel that we have a fiduciary duty to our clients to take the most aggressive, legal, factually supported position that the client is comfortable with, even if the IRS will be really pissed about it.  If the position is not frivolous, can at least be argued as reasonable, and the client is knowledgeable and comfortable with the worst case scenario, we are obligated to take that position, regardless of our personal feelings about it.  This includes taking positions against published IRS guidelines if we feel they are not supported in the code and have not been litigated.

I know most preparers do this with regularity, and even some of the ones who talk about "their license" will take the right position when push comes to shove, but I worry that there are preparers out there who are overly cautious or do not give the client the chance to make an informed decision.

It is, after all, the client's money.

Warning - Tax Resolution Scams

You see a lot of advertising on TV for tax settlements and stopping of enforcement actions.  You need to be VERY careful about these.  Most are scams that, while what they say is technically true, you will end up worse off for having spent thousands of dollars.  Most of these services are one trick ponies who help you request an Offer in Compromise (OIC).  This is where you offer the IRS less money than you owe.

The problem is that the VAST majority are disapproved.  You have to prove that you essentially will never be able to pay the money.  While your offer is being considered, the IRS will generally suspend collection, garnishes and levies.  But they come back full force months later when they deny the OIC.  You also may have reset some statutes of limitations.  You also won't get a refund from the people you paid thousands to help you apply.

Before paying anyone ANYTHING to get involved, talk to several reputable CPA's Enrolled Agents or other tax professionals about your issues.  Most will at least talk to you about the issues for free.  If you decide an OIC is warranted, work with an overall tax expert, preferably someone local.  You probably have some great CPA's or EA's in your area who will be far more helpful than some TV scam artist.