Homework Question on Settling Tax Dispute in IRS
- Why might it usually be desirable to settle a tax dispute with an agent, rather than appealing to a higher level within the IRS?
- Also .. why might it sometimes be in your clients best interest to seek resolution at the higher level within the IRS?
Homework Answer on Settling Tax Dispute in IRS
There are a number of reasons why a client would want to find a solution in a tax wrangle with an agent, as opposed to soliciting help within the IRS, at a higher level. First, the client and the agent may be able to settle the existing dispute without complications or litigation. Secondly, when settling the dispute with the agent, there is a possibility that the taxpayer will not have to present documentations or file a suit in a court of law.
Thirdly, the agent may permit more time to the taxpayer or client to explain him or herself. Fourthly, this enables the taxpayer obtain vital information from the agent that would have not been provided by those in higher positions in the IRS. The other advantage is that the agent could give the client an opportunity telling his story, an unlikely situation in the higher authority levels in the IRS. By settling a tax dispute with an agent, a taxpayer evades new issues and complications that may arise in high authority IRS positions (Stilwell, 2014).
However, other clients might find it best to seek resolution to a tax dispute at a superior rank in the IRS rather than appealing to the agent. This option is preferable because the agent may not be in a position to settle all the issues identified by the client. Secondly, there are instances where agents ask for bribery in order to solve a tax dispute, thus, the option helps evade compromising situations with the agent. At superior ranks in the IRS, the client is able to view the financial transactions he has had with the bank, besides receiving detailed information about his taxes. An agent cannot access such information. (Crawford, 2013).