When it comes time to select tax representation, you generally have three options: Attorneys, CPAs, and Enrolled Agents. Each of them brings something a little bit different to the table, and depending on the nature of your IRS problem, you will want to choose wisely.
First, you need to understand that most attorneys do not specialize in tax representation. Even tax attorneys, who specialize in tax matters, normally specialize in tax law, not IRS collections or audit representation. If you are facing a criminal tax investigation or are taking a matter straight to tax court, then an experienced tax attorney is your logical choice. For other types of IRS matters, you will probably need somebody with the accounting background on top of the legal background.
Your next logical person to consider is a CPA, and depending upon the nature of your IRS issue, a CPA is the way to go. If your tax problem is primarily based on direct accounting matters, such as justifying mathematical calculations, validating specific deductions or income items, or filing missing returns, then a CPA is probably the person you need.
You will most likely want to secure the services of an Enrolled Agent if your tax problems involve any of the following:
- General audit investigation covering multiple years
- Collections action from a Revenue Officer (field collections agent)
- Any sort of administrative Appeals involvement
- Liens, levies, wage garnishments, etc. that you need released
- Payroll tax issues
- Attempting to reduce penalties
- Filing an Offer in Compromise
An Enrolled Agent is specifically licensed directly by the U.S. Treasury Department to represent taxpayers on matters involving issues like those listed above, and is generally more experienced than CPA’s and attorneys in regards to these specific issues.
In my upcoming book (to be published soon) about resolving your IRS issues on your own, I’ll be writing very specifically about the issues listed above. The book will be able to help you wisely select your representative if you decide not to pursue tax resolution on your own (which, for complicated cases, I really don’t recommend).
I hope this provides some basic help in selecting the type of licensed representative to help with your IRS problems. Most important of all — make sure the person working your case really is licensed. There are a lot of companies in my industry that employ unlicensed representatives to work your case, so beware of this.