Handling an IRS Notice Yourself or Hiring a Professional

What drafting software does and does not do

IRS Audit Defense Pro is software. It helps you organize the facts of your situation and draft a response letter that you read, edit and send yourself. That is the whole job, and it is worth being precise about the limits.

It is not a law firm, a CPA firm or an enrolled agent. It does not give legal or tax advice, it cannot act for you with the IRS, and it cannot promise any outcome. It does not decide whether your position is correct, and it does not sign a power of attorney on your behalf. You remain the person responsible for what is in the letter and for sending it on time.

Who is allowed to represent you

The rules for who may practice before the IRS are in Treasury Circular 230. In general, these people may represent you:

• Attorneys in good standing.
• Certified public accountants in good standing.
• Enrolled agents, who are credentialed by the IRS to represent taxpayers.
• Enrolled actuaries and enrolled retirement plan agents, whose representation is limited in scope.
• You, as an individual representing yourself, and in limited cases certain non-practitioners such as an immediate family member.

The unenrolled preparer caveat

Many people prepare returns without being an attorney, CPA or enrolled agent. IRS Publication 947 describes unenrolled preparers as having limited rights, for example only before certain IRS employees and only for returns they prepared and signed, and not before Appeals or revenue officers. Before you rely on someone, ask what credential they hold and whether it covers your type of issue.

To authorize a representative, you generally sign a power of attorney. Form 2848 lets the named person act for you within the scope you list, while Form 8821 only lets them see your information. The comparison page on those forms explains the difference.

Neutral signs that professional help may be worth considering

Plenty of people resolve a notice on their own, and nothing here means you must hire anyone. These are circumstances where some people decide a second set of expert eyes is worth the cost:

• You received a notice of deficiency, which has a firm Tax Court filing deadline, and you are unsure whether to petition the Court. The Tax Court allows you to represent yourself or to hire a practitioner admitted to its bar.
• The matter has moved from a notice into an in-person or field audit, and you would rather have someone attend with you. A representative with written authorization can appear in your place.
• The IRS has sent a final notice of intent to levy or filed a lien, and you are weighing hearing rights, payment options and your finances at once.
• The amounts are large, or several years and several issues are tangled together, such as a business, rental activity and foreign accounts in the same return.
• You cannot get the records you need, or the facts are disputed in a way that needs interpretation of the law rather than just documents.
• You simply find the process stressful and would prefer a professional to handle contact with the IRS.

Free and low-cost routes

Cost is a real factor, and there are options besides full-price engagements. A Low Income Taxpayer Clinic may represent eligible low-income individuals in audits, appeals, collection matters and before the Tax Court, for free or a small fee. Clinics are independent of the IRS, though partly IRS-funded. Eligibility rules, including income limits and typical amounts in dispute, are on the IRS and Taxpayer Advocate Service websites.

Separately, the Taxpayer Advocate Service is an independent IRS office that may help if a problem is causing financial hardship or has dragged on. It does not provide legal or tax preparation advice, but it can be a useful channel when normal routes have failed.

Questions worth asking before you engage anyone

A good conversation up front prevents surprises later. Consider asking what credential the person holds, whether they have handled your kind of notice before, how fees are structured, who at the firm will actually handle your case, and what they will need from you and by when. Ask whether they will file a Form 2848 so they can speak with the IRS directly, and what you will still need to do yourself.

Whichever way you go, keep your own copy of the notice, the response date, and every document you send. If you start with a drafted letter and later bring in a professional, that organized file saves everyone time.

Frequently asked questions

Sources

• Circular 230, 31 CFR Part 10 Subpart A
• IRS Publication 947, Practice Before the IRS and Power of Attorney
• Low Income Taxpayer Clinics
• Who may use the Taxpayer Advocate Service
• U.S. Tax Court: starting a case

Related guides

• Form 2848 vs Form 8821: Represent or Just View?Form 2848 is a power of attorney that lets the person you name represent you before the IRS and receive your tax information, within the scope you list.
• The Taxpayer Advocate Service: Help When an IRS Problem StallsThe Taxpayer Advocate Service is an independent office within the IRS that can help when an IRS problem is causing financial hardship, has gone unresolved for more than 30 days, or the IRS missed a promised date.
• CP3219A: your notice of deficiency and the deadline printed on itA CP3219A is a Statutory Notice of Deficiency.
• IRS field audit: what happens when the auditor comes to youA field audit is an in-person IRS examination held at your home, your business, or your representative's office.
• How to appeal the results of an IRS auditIf you disagree with audit findings, respond to the letter that proposes the changes by the date it gives, which is generally 30 days.
• The IRS Taxpayer Bill of Rights, in Plain EnglishThe Taxpayer Bill of Rights lists ten rights, including the right to be informed, to challenge the IRS's position and be heard, to appeal to an independent forum, and to retain representation.