With nearly 40 years of accounting experience, the biggest problem McAlister sees among his clientele is the inability to pay back taxes. —
In a recent interview, McAlister outlined three key aspects that have helped his clients overcome their tax debts.
1.) Power of Attorney
The first crucial element for a client who is in trouble with the IRS, according to McAlister, is to sign a power of attorney, which addresses several issues in a tax dispute case.
When asked to elaborate, McAlister commented, “Once a client signs a power of attorney, they no longer are obligated to deal directly with the IRS.”
“Instead we will speak and negotiate with the IRS on their behalf. Wherever possible we never want a client to talk to the IRS, as they could accidentally say the wrong thing in a time of heightened stress.”
McAlister added that he is “impartial” in dealing with the IRS, which further helps him understand what the IRS motives are and helps him get clear about the case.
2.) File All Returns
Another key part of McAlister’s strategy when dealing with an IRS tax resolution case is ensuring all and any outstanding tax returns are filed, in order to get the lay of the land.
“Filing the tax return – which is standard procedure – is something I can do on my client’s behalf. This helps us understand exactly what a client owes compared to what the IRS says they owe”, he added.
Quite often McAlister see clients not filing returns that are long overdue because they feel it is going to be a criminal offence when the IRS finds out.
When asked to expand on this point he said, “When it comes to returns that have not been filed, I make sure my clients understand that they have not committed a felony just because they didn’t file a return, which is big misconception. The only thing that is considered a criminal activity is incorrectly reporting income.”
3.) Payment Plan
Once understanding the IRS’ case and filing a client’s returns, McAlister can fully grasp their overall financial picture and offer options customized to his clients.
When asked about payment plans, he said, “If the settlement is $25,000-$50,000, then the payment plan can be in the region of 72 months. If the IRS is able to direct debit that amount from a bank account, then they won’t file for a lien on a client’s property. If the settled amount is over $50,000, then a lien will be filed no matter what, but you get 84 months to pay the amount back.”
“However, oftentimes, my clients might not be in a position to pay back the IRS in full, so at this stage, we can discuss other options” he said.
One such option, McAlister says, is to come up with an “offer in compromise”, which allows them to negotiate with the IRS for less than what the client owed.
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