Episode 37: In this episode, Timalyn describes what happens during the process of you retaining tax representation. She provides explanations of what's going to happen during the 3 phases of tax relief. Timalyn walks us through the onboarding process, the investigation phase, compliance and negotiation. While she'll step in to represent you, it's still a partnership and she'll need your assistance.
Timalyn begins by mentioning Episode 9, which explains the 3 phases of tax relief. However, people still have questions about the process itself. This discussion is based on her process. Other tax professionals may do it differently, and that's okay.
The Onboarding Process
Everything begins with a consultation. While Timalyn offers a number of free resources, the consultation provides you the opportunity to ask her specific questions about your situation. She'll create a roadmap showing you how to resolve your tax debt issue.
While not every situation requires you to hire a tax professional to resolve the issue, some do. In Episode 36, Timalyn focused on the trust fund recovery penalty related to payroll tax issues. That type of issue definitely justifies hiring a tax professional.
If you decide to hire Timalyn within 14 days of your consultation, she'll credit you the cost of the initial consultation.
4 Things Timalyn Needs, before She Begins
The first is an engagement letter. It outlines the services she's offering, when payments are due, what you can expect from Timalyn and what she will expect from you. The letter must be signed before the work begins.
The second is a completed IRS Form 2848. This is a form designating Timalyn to act as your Tax Power of Attorney. This form is then sent to the IRS. It authorizes her to speak directly to the IRS on your behalf.
The third item is a signed Form 7216, which gives her permission to use a 3rd party software to pull your transcripts and evaluate your data.
The fourth item Timalyn needs is your payment for her services. In her firm, Timalyn typically breaks the pricing up by each phase. She goes on to explain that at a minimum, the investigation phase has to be paid for, before the work begins.
Timalyn charges different fees depending upon whether you owe more or less than $100,000.
If your tax issue is $50,000 or more, she will need your financial information. Expect a detailed questionnaire from Timalyn.
The Investigation Phase
This is when Timalyn begins communicating with the IRS and evaluating your tax transcripts to identify any missing returns and to determine what penalties have been assessed. She's also going to work with you to understand if you were going through something that may be eligible for abatement (i.e. "forgiveness").
Once this is completed, she'll schedule a case update with you. At this point you'll be able to decide if you can move forward on your own, or if you'll still need Timalyn to continue working on your resolution. If she'll need to be involved, Timalyn will provide a price for the compliance process.
The Compliance Phase
This is where it really becomes a partnership. Efficient communication and information is critical. When any missing returns are prepared and submitted, this will alter the amount of tax debt and that typically results in additional penalties may be assessed.
A second case update will be scheduled to review your completed returns before they are filed. You'll need to sign and file them. Timalyn may be able to e-file the returns, using IRS Form 8879.
The Negotiation Phase
At this step, you are still in a partnership with Timalyn, assuming you've retained her to represent you. She'll continue to speak to the IRS on your behalf. However, she'll need your financial information including current expenses, debts, and asset information. She needs to have the information in a timely manner (refer back to your engagement letter).
IRS Form 433-F is the most common document Timalyn and the IRS will use during the negotiation. It's a detailed summary of your financial situation. Remember, the IRS wants its money, but the information on this form can help prove to the IRS that there's only so much available.
There's a chance you may qualify for a temporary hold on the collections by having your debt classified, Currently Not Collectible ("CNC"). Listen to Episode 18 to learn more about this.
If you're not eligible, you may still qualify for an installment agreement, which Timalyn covered in Episode 10.
There's also the option of making an offer in compromise. Timalyn has videos describing the offer in compromise on her YouTube channel. Here are a couple:
1) Offer in Compromise: Do You Qualify?
2) What is an Offer in Compromise?
This was a lot of information. The main point is that you'll need to stay in communication with your tax professional. Don't disappear. By ignoring or responding slowly, you'll delay resolution of your tax debt and may incur additional interest on the back taxes.
IF YOU ARE A TAX PROFESSIONAL
Before she goes, Timalyn wants to remind tax professionals that on September 18, 2023, the Tax Pro Representation Journey, a private podcast and article subscription will launch. Make sure you take a look at the information and subscribe.
Please consider sharing this episode with your friends and family. There are many people dealing with tax issues, and you may not know about it. This information might be helpful to someone who really needs it. After all, back taxes shouldn't ruin their life either.
As we conclude Episode 37, we encourage you to connect with Timalyn on social media. You'll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms.
Remember, Timalyn Bowens is America's Favorite EA and she's here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today's episode.
For more information about tax relief options, visit https://www.Bowenstaxsolutions.com/ .
If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: https://www.americasfavoriteea.com/contact.
Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
