What Taxpayers Should Know About Hiring IRS Settlement Lawyers

Andrea Miller
Expert Contributor
Last Updated:
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  • Tax attorneys have the knowledge and experience necessary to negotiate with the IRS.
  • You may want to hire a tax attorney if you are facing more than $10,000, criminal charges, or an audit.
  • If you owe more in tax than you can afford to pay, a tax attorney can help you find a resolution.

IRS settlement lawyers help taxpayers resolve issues with the IRS. If you are facing a complex tax problem such as an audit or a past-due balance you cannot afford to pay, a qualified tax attorney can advocate on your behalf with the IRS. Here’s what you need to know when hiring a lawyer to help with your IRS settlement.

Should I Hire a Tax Attorney?

Tax attorneys have completed three years of law school and specialize in resolving IRS matters. Taxpayers can benefit from their knowledge and negotiating skills. For example, an attorney can prevent the IRS from pursuing inappropriate questions during official proceedings.

The best course of action to handle your tax debt depends on your specific situation. Most taxpayers are unfamiliar with the jargon used by the IRS. They may be confused by complex tax laws and stringent deadlines. What’s more, making an error when dealing with the IRS can result in hundreds or even thousands of dollars in fees and penalties.

For these reasons, it’s important for taxpayers to consider hiring a tax attorney when dealing with the IRS. In general, you should consider legal representation if you owe the IRS more than $10,000 or if you are concerned that you may be charged with fraud or tax evasion.

You will get the benefit of working with someone who has years of experience in dealing with the IRS and extensive knowledge of complicated tax laws. If you choose the right attorney, he or she will be well-versed in assisting taxpayers who are in similar situations.

What Taxpayers Should Know About Hiring IRS Settlement Lawyers

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Some of the most common situations in which you should hire a tax attorney include the following:

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  • You are being audited. Audits often result in additional assessed tax, which means you may owe more than you can afford to pay. If this occurs, an attorney can work on your behalf to develop a payment plan, request abatement of penalties associated with your account, or request an offer in compromise.
  • You received an IRS notice, often called a CP, and you aren’t sure how to proceed. An attorney can review the notice and help you plan the best course of action.
  • You are in negotiations with the IRS. The legal language used in IRS communications can be difficult for non-attorneys to understand. If you hire an attorney, he or she can be authorized to work with the IRS on your behalf.
  • You are being investigated for a criminal charge, such as fraud or tax evasion. An attorney can advocate for you in court and potentially help you avoid steep fines and even jail time.

If you are under IRS investigation, the discussions you have with your attorney will be kept completely confidential under attorney-client privileges. This gives you the freedom to brainstorm solutions for your case and disclose the details without worrying that your lawyer will offer this information in hearings, trials, or depositions.

Settlement Options for Tax Debt

Several programs are available for taxpayers who owe more than they can afford to pay in taxes:

  • With an offer in compromise (OIC), the IRS agrees to settle your tax debt for less than the full amount you owe. The offer must represent the highest amount that can reasonably be collected from you before the statute of limitations runs out (typically 10 years). A tax attorney can help you craft an offer that is more likely to be accepted by the IRS.
  • The Fresh Start Program is designed to make it easier for taxpayers to enter an installment agreement with the IRS. Under this initiative, you can automatically be approved for an installment agreement if you have filed all past-due returns and owe less than $50,000 to the IRS. A tax lien, which can damage your credit, is no longer issued for balances of less than $10,000.

Cost of Hiring a Tax Attorney

If you’re struggling to repay the IRS, you’re probably concerned about whether you can afford to pay for a tax attorney. Some lawyers charge by the hour, while others have a flat service-based fee to help you establish hardship status, set up a payment plan, or submit an offer in compromise. Others may require a retainer, which is a prepaid fee for their work.

In tax matters that include criminal investigations, you should hire an attorney who can represent you both before the IRS and in court. Although this can be quite expensive, it reduces the likelihood that you will be sentenced to prison time. According to the agency’s statistical data, the IRS wins 80 percent of criminal cases brought to court, and the average sentence in these cases is between three and four years in jail.

When Can I Handle Tax Matters Myself?

Some basic tax matters can be settled without the help of an attorney. You can represent yourself with the IRS if you need to amend a prior-year tax return or have to file an extension for your tax return. These actions can be completed with basic forms.

Although taxpayers are permitted to serve as their own representative in audit proceedings, you should avoid doing so unless you:

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  • Have all the documentation requested by the IRS.
  • Completely understand the tax laws that apply to your situation.
  • Understand how you can appeal if you do not agree with the results of the audit.

Even in this situation, you should hire an attorney to represent you if you owe the IRS more than $10,000.

Solvable can help you find a reputable tax professional to resolve your IRS issues. We’ll gather information about your debt and match you with a well-reviewed company that has an impressive track record of helping taxpayers like you. Get started on the path to peace of mind today.


Andrea Miller
Expert Contributor
Last Updated: