Virtually all IRS contact with small-business owners is first made by mail. Failing to respond to these letters from the IRS will usually result in notices with a more threatening tone, and eventually in a phone call from the appropriate IRS official.
"Ignoring IRS notices is never the solution to tax problems," advises Betsy J. Joyce, a CPA with Joyce & Associates P.C. in Wayne, Pennsylvania, and a member of the American Institute of Certified Public Accountants. Joyce recommends contacting your CPA as soon as possible after receipt of an IRS notice to discuss the situation. "In many cases, your CPA can offer you a reasonable plan for working out the problem before the IRS initiates drastic measures, such as shutting down your business."
If the IRS has informed you that you are under criminal investigation, you should contact a tax attorney as soon as possible before answering any IRS correspondence or agreeing to interviews. If you do not know an attorney who handles tax matters, ask your CPA for a reference.
Although dealing with the IRS is never a pleasant experience, the Taxpayer Bill of Rights 2 has provided small-business owners with new ways to fight back against overreaching IRS agents and bureaucratic nightmares. When involved in a tax dispute, your knowledge and business sense may be your best resources for battling the unlimited resources of the IRS.
Carol Ward, (719) 548-8807.
Joyce & Associates P.C., 950 W. Valley Rd., #2903, Wayne, PA 19087, (610) 687-8200.