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Can You Settle Tax Debt on Your Own Or Do You Need to Hire a Tax Professional

07th February 2011
By Phil Salazar in Taxes
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You'll also come across certain individuals licensed by The IRS. Unlike tax preparers, an enrolled agent can well represent you at an audit. The Certified Public Accountant goes through a really tough process to get their license. If you have a complex financial situation, then you can think of a CPA to do your taxes. A CPA can plan your taxes in such a way that you may have to pay as little tax as possible. It is much expensive to hire an efficient CPA and therefore, you may think of doing taxes on your own.

Why would you need a tax accountant? Most people feel that they can handle their own tax situation, however, there are some benefits that make hiring someone well worth the cost. For example, preparing your own taxes can be quite time-consuming and stressful. You can be left with a lingering fear of an audit situation. Many people are frustrated and confused -- which can lead to mistakes. Hiring a professional gives your tax returns an increased level of accuracy. Your tax situation could be quite complex, including stock market investments, business dealings, rental properties and other tax situations. If it is, you will need specialized advice.

Local tax firms offer specialize in individuals and small businesses. Make sure that you check out their expertise to make sure that they can handle your taxes. Enrolled Agents have passed a rigorous test and a background check by the IS. They often specialize in complex tax situations. CPAs have passed the CPA exam and are licensed by the state they work in. They usually specialize in specific areas, such as audits, taxes or business consulting. They are best for complex accounting, however not all CPAs will handle tax situations.

If you do not want an professional helping you in filing the tax returns of your business, then it is possible for you to do it by yourself through the numerous tax help web-sites that are available, including one run by the IRS itself. When you decide to go in for self help it is important to choose the right tax form to file and it is also necessary to have some amount of experience in tax related matters.

While it is possible for a number of taxpayer to obtain help with their taxes online for free there are others who must acquire the services of a professional. These services may include an accountant, a professional tax preparer, or a tax attorney. Each of these services are likely to cost a fee, but they often reduce the amount of errors on a tax return. A tax attorney is usually brought in when an audit has been requested by the Internal Revenue Service (IRS); however, there are many individuals who may use a tax attorney if they feel that a problem may arise on their tax return. Individuals who recently divorced or are going through a child custody battle are likely to obtain the services of a tax attorney when trying to decide which status to file.

For much lower fee, John Doe, could now prepare his own taxes, at 2:00 o'clock in the morning, enjoying a fresh cup of coffee at his kitchen table. No more, going to the tax professional, no more waiting days for the returns, no more paying high fees, finally FREEDOM (the only issue with these packages is that you had to actually buy a software and install it on your hard drive before you could use it. So, you could only use it at your own computer). Submitting the returns to the IRS, as before, was done by printing, signing and mailing. For the tax preparers, this was a shocker, the sky is falling, and nobody needs us any more...

For that reason several online tax companies are developing the "Real-Life-Event-Tax-Guide". When using such a solution, you will be asked to talk about the events that affected you in the year, marriage, new baby, move to a new house, started college, changed employment status, etc.. You can also choose from a list of events already identified by these websites. When you do that, the website will explain, guide and advice you on how to maximize your tax benefits relating to this event.

If you're tempted to go it on your own when it comes to IRS debt settlement, consider again and consult with a tax specialist who knows the ropes. You'll sleep easier knowing you've discussed this with someone who has the latest information at his or her fingertips and can help you choose wisely for yourself.

If a taxpayer cannot pay the full amount due, then they should, according to the IRS, still file the extension. Penalties will apply. Extensions are a good thing, it allows Tax Professionals to take their time and prepare a true and correct tax return, rather then working fast and perhaps missing the little things, because we were tired and seeing double by April 15th. The little things could include, the deductions on Schedule E for long distant telephone calls and faxes for rental property in another state.
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