Q: If I owe the IRS unpaid taxes, should I call the IRS to work out this issue myself or should I hire a tax attorney?
I just received a letter from the IRS for unpaid Federal Taxes. I was awarded a settlement from my former employer. Should I contact the IRS myself on this issue or should I hire a Tax Attorney to do this for me? I believe that the entire amount of the settlement should not be taxed, or possibly taxed at a different rate, as there are many different items listed on the settlement agreement for which the claim was paid.
A: Settlements can be tricky because they have to be closely read to determine the proper tax classification of each item. That said, many taxpayers can choose to try to handle issues with the IRS on their own. There is certainly a wealth of information available through the IRS publications, although they are a little light on citations to the tax code and associated regulations. The challenge for taxpayers is to be able to understand all of the particularities of the rules and regulations to be able to translate the factual situation into something the IRS will accept, assuming that the IRS interpretation is lacking.
A tax attorney is someone that will be able to determine how the items are properly classified. Then, (usually for a fee), they will be able to tell you how to present it to the IRS or directly handle the issue for you.
It's an analysis of costs and benefits - handling it yourself will certainly cost less in terms of money, but will certainly cost time, both in reading and understanding the tax code, rules, and regulations as well as time to prepare and present the issue to the IRS. Hiring a tax attorney will cost more money, but you should get someone that can provide you with information and experience handling tax issues (and a representative, if that's what you want). That's something for you to decide.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.