Running into tax trouble happens. Sometimes it’s deliberate and willful, but for others, it’s due to an accountant’s negligence or mistakes by business people.
When tax trouble does come knocking, it can be in the form of an IRS revenue officer. They represent the IRS’s collection division and know the ins and outs of IRS procedures and U.S. tax law.
Revenue officers typically abide by protocol, but they’re given a wide array of authority to collect back tax debt. They initiate communication with a delinquent taxpayer through telephone calls, written notices, or in-person visits at a taxpayer’s home or work place. They can also issue you a summons, mandating your appearance at meetings.
But their real power lies in their ability to issue bank levies and wage garnishments, and to seize assets. That’s why it’s important to know how to stand up to an IRS revenue officer. Here are a few tips.
Don’t ignore IRS revenue officers. If you do, they can designate your back tax situation into one requiring rapid debt collection, where bank levies, wage garnishments, and other collection efforts are instituted. Given the power IRS revenue officers have over a taxpayer’s finances, ignoring them comes at your peril.
Be truthful – and prepared. IRS revenue officers often attempt to set up a meeting where financial information will be requested and discussed. While it’s never OK to lie to an IRS revenue officer, don’t surrender financial information without being prepared. If you need to check your records, let the revenue officer know.
Be on your best behavior. Working with an IRS revenue officer is certainly no pleasant experience, but don’t let that come out to the officer. It’s better to remain positive and express your cooperation and that you’ll be reasonable. IRS revenue officers have a wide degree of discretion when it comes to collecting back tax debt. It’s better not to give them the perception that your complaints and lack of cooperation required a wage garnishment.
Request the appropriate forms. A revenue officer will often attempt to set up what’s called a collection interview. The purpose of this meeting is for the revenue officer to gather your financial information. Request from the revenue officer a copy of the collection form, typically Form 433-A, 433-B, or 433-F Collection Information Statement. Fill in the form before going into the meeting.
Don’t get coerced into signing anything. The 433 forms are divided into two parts: assets and liabilities, and income and expenses. While assets, liabilities, and income can be more easily ascertained, the expenses part can get tricky. The key here is to avoid the revenue officer’s attempts to have you sign the form as quickly as possible. If you underestimate your expenses, the revenue officer will get the impression that your disposable income is higher than it really is, which will overestimate your potential IRS payments. Tell the revenue officer you want to go over the forms at home – not at the IRS office – with your records and/or tax advisor at hand. If a revenue officer resists this request, ask to speak with a superior.
Working with an IRS revenue officer can be intimidating, but if you’re prepared with the facts and stand your ground, you can be ahead of the game.
Has an IRS revenue officer ever tried to intimidate you? We want to know your story. Comment below or tweet us at @StopIRSDebt.
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